MUNICH, Germany (AFP) - German business confidence braved surging oil prices and the strong euro to remain stable in October, a widely watched barometer of industrial confidence in the eurozone's biggest economy showed.
The business climate index calculated each month by the Ifo economic research institute in Munich edged up 0.1 point to 95.3 points in October, outpacing expectations for a slight decline.
The index had slipped by 0.1 point the previous month and analysts had been pencilling in a decline of around 0.2 point this month.
Ifo President Hans-Werner Sinn said the index "has remained stuck at this level, roughly equivalent to its long-term average, for three months in a row. The economy is continuing to grow, but without the same momentum seen in earlier upturns. Employment expectations remain poor."
Surging oil prices and the strong euro were likely to be among the main reasons why optimism about the German growth outlook remained so muted, analysts said.
For its monthly survey, Ifo polls around 7,000 companies on their assessment of current business and their expectations for the next six months.
A breakdown of the data showed that while companies were feeling slightly better about the outlook for the coming months, their assessment of their current situation was little changed.
The current sentiment sub-index slipped to 94.7 points in October from 94.8 points in September.
And the expectations sub-index edged up slightly, rising to 95.9 points from 95.7 points.
By sector, business expectations deteriorated slightly in the manufacturing and wholesale sectors, but improved somewhat in the retail and construction sectors.
The data were released just ahead of the scheduled publication of the German government's official growth forecasts for this year and next year.
Recent press reports have suggested the government is forecasting a slight slowdown in the pace of growth to 1.7-1.8 percent next year from an anticipated 2.0 percent this year.
10/25/2004 - 09:55 GMT - AFP