German Business Climate remains positive

As the best performer among Europe’s eight biggest markets in 2007 so far, the economic outlook in Germany is promising. Munich-based research institute, the IFO, recently reported that the German business climate remains favourable, after their sentiment index reached 108.6 this month, its second highest level since reunification. The IFO’s survey is based on responses from 7,000 companies covering a broad spectrum of industries.

2006 saw the eurozone grow as a whole, with Germany playing a pivotal role. As a result of robust export growth and improved competitiveness fostering strong investment, this looks set to continue. Both DaimlerChrysler and Siemens, stocks held in both the Gartmore European Selected Opportunities Fund and SICAV Continental European Fund run by Roger Guy and Guillaume Rambourg, reported significant first and second quarter profits respectively.

“In spite of concerns of a slowdown in the US economy a combination of factors are contributing to the continued recovery of the German economy. Growing investor confidence, an increase in corporate spending on goods such as factory machinery as well as a drop in unemployment, hitting a six year low of 9.2%, are all key points. Indeed the country appears to have overcome the drop in consumer spending, which was a result of the sales-tax hike at the beginning of the year”.