The yo-yo in German economic fortunes continued yesterday when a closely watched investor confidence survey jumped to a seven-month high.

The Zew Centre for European Economic Research in Mannheim said its analyst survey, looking forward to the next six months, rose to 6.9 points, up from -15.7 in November.

Investors’ view of their current situation showed a more modest rise to 5.7 points from 5.4 last month.

Europe’s largest economy would “continue to cool on the way into 2013” but would “not have to face recession”, said Zew president Wolfgang Franz in a statement. “But that’s only as long as the crisis in the euro zone doesn’t deepen once again.”

The positive Zew signal comes on the heel of last week’s grim Bundesbank forecast of stagnation and even recession at the start of 2013.

Germany’s central bank cut its 2013 growth forecast from 1.6 per cent to 0.4 per cent after the ECB predicted a 0.3 per cent contraction in the euro zone next year.

The federal economics ministry has warned that production was down 2.6 per cent in October and, on Monday, General Motors announced it was ceasing production in one of its four Opel plants in Germany.

Taken together, analysts suggested Germany faced a rocky start to the new year but would soon pull out of the worst.

“Should the sovereign debt crisis continue to ease in the next few months, as we expect, this implies a significant revival of the economy in the course of 2013,” said Ralph Solveen, economist with Commerzbank.

Munich’s Ifo economic institute provided another chink of light yesterday. After an eight-month downward spiral, the Ifo said its small and medium-sized enterprise business confidence index rose in November.

Managers in the largely family-owned Mittelstand, the backbone of the German economy, were more confident about their current and future prospects going into 2013.