Ifo business climate brightens surprisingly

After the breakthrough in the Greek crisis the companies are rating their business prospects more favourably again for the coming half-year.

The Ifo business climate index rose from 107.5 to 108.0 points in July, with the companies interviewed judging both their current business situation and their prospects better again, according to the Ifo Institute.

After two falls many economists had expected another slight damper. However, exports and the domestic economy continued to go well, and with oil becoming even cheaper the German economy is continuing to recover.

Machine building is going very well, expectations in the chemical industry are rising and the booming building trade is also displaying more optimism. Cheap loans are supporting both company investments and private home builders.

Wage increases and secure jobs are also boosting consumption, with retailers doing better business in July. The only factor clouding expectations is the price war.