The index for the business climate rose as the Munich Ifo announced

The mood in the German economy once again improved significantly in June. The index for the business climate rose by 2.6 points to 101.8 points, as the Munich Ifo Institute announced. This is the highest level since November 2018. Around 9,000 companies took part in the monthly survey for the business climate. Analysts had expected a weaker increase to 100.7 points. Both the business expectations of the companies surveyed and the assessment of the current situation brightened significantly. "The German economy is shaking off the Corona crisis," commented Ifo President Clemens Fuest. In the services sector in particular, the business climate index made a significant leap up. As the Ifo Institute announced, the logistics industry and IT service providers reported "business is going very well". The business climate has also brightened in the manufacturing sector. The corresponding sub-index reached its highest value since April 2018. However, the expectations here were somewhat less optimistic. "Many companies are worried about the increasing bottlenecks in preliminary products," said the Ifo. According to the analyst Jens-Oliver Niklasch from the Landesbank Baden-Württemberg, the renewed increase in the Ifo business climate can be explained by the easing of the corona measures and the falling number of infections, which benefit retailers. "The economy is now taking off," commented Thomas Gitzel, VP-Bank's chief economist. High growth rates can be expected in the second and third quarters. Even if many companies from the manufacturing sector are currently complaining about material shortages, Gitzel does not see any serious threat to the upswing here. "German industry does not seem to be particularly affected by the scarcity of materials," said Gitzel. Commerzbank's chief economist, Jörg Krämer, sees the shortage of materials as a brake on the upswing. "Due to a lack of intermediate products, companies are unlikely to be able to convert the booming demand into increasing production well into the second half of the year," said Krämer.