German Business Confidence Rises

BERLIN — German business confidence unexpectedly rose this month, posting its third straight increase despite the near-record strength of the euro and concern over the future outlook, a closely watched survey showed Wednesday.

The Ifo institute's index rose to 104.8 points for March from 104.1 in February. Economists surveyed by Dow Jones Newswires had forecast that the index would decline to 103.4 points.

"On the whole, the economic situation of German industry and trade is robust, but the expectations continue to point to a cyclical weakening," Ifo president Hans-Werner Sinn said in a statement.

Managers' assessment of their current economic situation improved following a dip last month, with a subindex which measures that increasing to 110.3 points from 107.9.

However, their outlook for the next six months darkened, with that subindex declining to 98.2 points from 99.

The overall climate worsened in the manufacturing sector, where managers' "optimism regarding exports has weakened," Sinn said — "but their hiring plans point to a further increase in staff levels in the coming months."

The high value of the euro — which makes European manufacturers' goods more expensive overseas — and pessimism over prospects of a U.S. and wider economic slowdown have raised concern over the future strength of exports, which have been a key driver of Germany's current economic upswing.

Ifo said managers in the construction industry were less confident this month, but the climate improved in the wholesale and retail sectors.

The unexpectedly bright Ifo reading comes after another closely watched indicator, the ZEW institute's index of investor confidence, also defied forecasts to rise for a second consecutive month in March.

Munich-based Ifo based its survey on responses from some 7,000 firms.

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