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German business confidence slips as outlook clouds


German business confidence slips as outlook clouds
Associated Press
Posted by Calvin Lee Ledsome Sr., Owner and Founder of: https://economicnewsblog.wordpress.com and http://www.LedSomeBioMetrics.com

BERLIN (AP) — German business confidence has slipped off a two-decade high as managers’ outlook for the next six months was tempered by a slight decline in optimism on exports, a closely watched survey showed Friday.

The Ifo institute said its confidence index was down slightly to 111.1 points for March from 111.3 in February. The slip followed nine consecutive months of increases, and Ifo stressed that the “traffic lights still signal ‘green.'”

Managers’ assessment of the current situation improved and the overall decline was due entirely to a less optimistic six-month outlook. The subindex measuring expectations sank to 106.5 points from 107.9 in February.

Ifo said that manufacturing firms plan to increase staff numbers even though “future export business is no longer assessed quite so optimistically.” Friday’s survey showed that retailers, wholesalers and construction firms also were less optimistic for the next half-year.

Export strength has been central to Germany‘s powerful economic recovery over the past year, although it has been accompanied by signs of improving domestic demand.

Slightly less than half of this month’s Ifo survey responses arrived after problems started at Japan’s earthquake-damaged Fukushima Dai-ichi nuclear complex.

There was little evidence, however, that events in Japan pose a direct, immediate economic threat to Germany. Problems with delivery of Japanese products to German carmakers, for example, “could only delay but not stop production,” ING economist Carsten Brzeski said.

“The only serious and substantial threat for the German economy from recent global developments is linked to energy prices,” which could rise on spreading political unrest in the Arab world or as a results of consequences of the Japanese nuclear plant accident, he added.

The Ifo decline “is no reason to get petrified,” Brzeski said. “The economy is slipping on oil but is not tumbling. The fundamentals of the German economy are strong enough to withstand some setbacks.”

IHS Global Insight economist Timo Klein noted that “Germany’s increasing domestic strength continues to be boosted by interest rates that are much too low for its own economic conditions” — even though the European Central Bank is expected to raise rates from a record-low 1 percent next month.

“The German economy will stay very robust during 2011,” assuming global growth isn’t hobbled by much wider Middle East troubles, a major escalation of Japan’s nuclear crisis or fast-growing China slamming on the brakes to combat inflation, he added.

The monthly Ifo survey is based on responses from about 7,000 companies.

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Calvin L. Ledsome Sr.,

Owner and Founder of:  http://PublicBlogNewsPostingService.com and http://LedSomeBioMetrics.com

Thank you for visiting, do come back for more news…
Warmest regards,

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