Germany's business climate index up for 6th consecutive month

By Bahattin Gonultas

BERLIN (AA) - Germany's Ifo Business Climate Index rose to 88.4 points in June, extending its upward trend for the sixth consecutive month, as interest rate cuts and the government's large fiscal package made companies more optimistic about their future business prospects.

The Ifo Institute for Economic Research published on Tuesday the results of its June Business Climate Index survey, which involved approximately 9,000 companies.

According to the results, the Business Climate Index for industry and trade, which stood at 87.5 in May, rose to 88.4 points this month.

The market expectation for the index was for it to increase to 88.2 points.

Germany's Ifo Expectations Index rose from 89 to 90.7 points, and the Current Situation Index rose from 86.1 to 86.2.

Ifo said that confidence among German companies has improved; expectations, in particular, have improved.

It noted that confidence in the German manufacturing sector had recovered marginally, adding that companies continue to express dissatisfaction with their order books.

The institute also said that the index showed a particularly strong recovery in the service sector and that confidence in the construction sector continued to recover.