German business sentiment rises for third month

German business morale rose to its highest level in six months in January, climbing for a third consecutive month, a survey showed yesterday, in a sign that 2015 got off to a strong start for Europe’s largest economy.

Ifo’s business climate index, based on a monthly survey of some 7,000 firms, increased to 106.7 in January from 105.5 in December.

That was the highest reading since July and compared with the Reuters consensus forecast for 106.3.

The latest survey also showed firms felt more upbeat about the current situation compared with in December. They also became slightly more optimistic about their prospects for the next six months.

The Ifo survey showed manufacturing, wholesale and retail sector improvements while construction firms fared slightly worse than in December. Last week surveys showed investor morale improving and Germany’s private sector expanding faster in January. The economy expanded by 1.5% last year thanks to private consumption and foreign trade.

Coalition sources have said the government may revise up its growth forecast for this year to 1.5% from 1.3%, with economists pointing to low oil prices and a weak euro as positives.

* Reuters