German business confidence unexpectedly rose in April, as companies' assessment of current conditions reached its highest level in three years, a monthly survey by the Ifo institute showed this morning.
Munich-based Ifo said its closely watched business climate index, based on a poll of 7,000 companies, rose to 96.3 from 95.4 in March.
Ifo said sentiment in the retail trade and manufacturing had recovered after the index fell for the second month running in March.
Economists had expected the index to fall to 95.1, with projections ranging from 94.4 to 96.0.
Ifo president Mr Hans-Werner Sinn said the April survey confirmed widespread forecasts that Europe's largest economy was on track for a mild recovery this year.
"The new survey results point to a further, if moderate, economic recovery," said Mr Sinn. "However it's too early to talk of a solid upswing."
Mr Joerg Kraemer, an economist at Invesco Asset Management, said the April survey indicated the recent falls in the Ifo survey's headline index were the product of overoptimistic growth projections.