Demand for German goods keeps factories alive during lockdown

The Ifo institute survey shows the country’s business climate index shot up to 96.6, the highest reading since June 2019, from an upwardly revised 92.7 in February

BERLIN

Business morale in Germany is higher this month than it has been in almost two years, as rising demand for manufactured goods keeps factories in Europe’s largest economy humming despite the pandemic and lockdown restrictions, a survey showed.

The Ifo institute said its business climate index shot up to 96.6, the highest reading since June 2019, from an upwardly revised 92.7 in February. A Reuters poll of analysts had pointed to a March reading of 93.2.

“Despite rising infection numbers, the German economy started spring with confidence,” said Ifo President Clemens Fuest. “Companies were noticeably satisfied with their current condition.”

The survey added to signs that the economy is navigating through the pandemic relatively unscathed in an election year marked by rising discontent with Chancellor Angela Merkel’s handling of lockdowns and a slow vaccination campaign.

Ifo said “exploding” demand for German goods from the United States and China pointed to an upswing in the industrial sector, where optimism was at its highest level since November 2010.

The survey also found that the services sector, which had been hit harder by lockdown measures in place since November, was also showing initial signs of a recovery.