German business confidence dipped only slightly in September despite a renewed surge in oil prices, pointing to a continuing modest upturn in Europe's largest economy, the Munich-based Ifo institute said today.
Its German business climate index ticked down to 95.2 from 95.3 in August, led by a worsening of companies' expectations about business in the next six months.
"The survey results point to a continuation of the moderate economic recovery," Ifo President Mr Hans-Werner Sinn said in a statement. Ifo economist Mr Klaus Abberger, who compiled the survey, said oil prices and exchange rates appeared to have had no big impact on sentiment.
However, he dismissed the idea that the survey's surprising resilience may indicate a pick up in the domestic economy, something all economists agree is vital to offset any weakening in foreign demand for German goods.
An index measuring firms' assessment of their current business rose to 94.8 from 94.7 in August, while that gauging expectations fell to 95.7, the lowest level since July 2003, from a revised 95.9 in August.
While the results of the monthly survey of around 7,000 executives more or less met the consensus among analysts polled by Reuters for a drop to 95.1 reaction was mixed.
"In the current climate of increased oil prices and some scepticism about the progress of recovery in the United States expectations could have fallen further. On these grounds the figures are very satisfactory," said West LB economist Mr Joerg Lueschow.
"This is only the second consecutive monthly fall in the overall Ifo business climate... However, the September reading is markedly below the January peak (97.5), we interpret this as a de facto downswing signal," said Invesco Asset Management Chief Economist Mr Joerg Kraemer.
Crude oil prices hit new record highs on renewed supply fears, with November Brent climbing to $46.05 a barrel before pulling back slightly to around $45.88 by 10:15 a.m.
High oil prices have stoked fears the US economy could slow sharply in the coming months as the effects of past tax cuts wear off, bringing global growth down with it.