German executives grew more confident for an eighth consecutive month in December, suggesting a European recovery is on track despite fears a strengthening euro may erode exporters' competitiveness.
The Munich-based Ifo economic research unit, which polls about 7,000 firms each month, said the strengthening of optimism in December was "primarily the result of more favourable expectations," which rose to the highest level in nine years.
Ifo's headline western German business climate index rose more than expected to 96.8, the highest since January 2001, from 95.7 in November. Economists polled by Reuters last week had predicted an increase to 96.5.
Companies' future expectations jumped to 111.0 in December, the highest since November 1994, from 108.7 the previous month, Ifo said. Firms' assessment of current conditions rose slightly to 83.3, from 83.2.
Evidence of a European recovery is mounting. Activity in the euro zone's services sector, which accounts for two-thirds of the economy, expanded at its fastest pace in more than three years in November, a survey showed earlier this month.
However, Italy's ISAE economic research institute published a gloomier survey on today, its index of Italian consumer confidence plumbing fresh seven-year lows in December.