Sentiment among German managers “improved considerably” as the ifo business climate index in May rose to its highest level in two years, the ifo Institute announced on Tuesday.
The ifo business climate index, which is based on a monthly survey of around 9,000 German companies, climbed to 99.2 points in May, up from 96.6 points in April, according to the ifo Institute.
“The German economy is picking up speed,” said Clemens Fuest, president of the ifo Institute, in a statement. German companies were “more satisfied with their current business situation” and also more optimistic about the coming months.
Expectations in the service sector brightened considerably as the business climate index climbed to its highest level since February last year. The ifo Institute noted that optimism also returned in the country’s hospitality and tourism sectors which saw a significant improvement of the current economic situation.
The business climate index for the trade sector also improved, according to the ifo Institute. Wholesalers continued to benefit from positive developments in the industrial economy, while retailers were hoping for a further easing of COVID-19 restrictions.