Royston Carr Asset Management - German business sentiment lifts, providing some relief from recession fears.
Online PR News – 04-April-2019 – Taipei, Taiwan – The Ifo's index which gauges business confidence is closely monitored and when it showed that German business confidence had improved by more than anticipated, it provided some relief for those fearing a recession in Germany.
Royston Carr Asset Management analysts say German manufacturing activity had reached its worst level in six years this month and the jump in confidence among German companies came as a surprise following six consecutive drops.
Analysts at Royston Carr Asset Management say the improvement could indicate that the German economy could pick up over the course of this year after it only barely avoided a recession in 2018.
In recent months, the outlook for Germany's economic growth has been negatively impacted by uncertainty surrounding the outcome of Brexit and rising protectionism which has caused the industrial sector in Germany to slump. The manufacturing slump also affected the growth outlook for the rest of the Eurozone.
While the encouraging news that business sentiment has improved may have helped to dispel concerns that Germany is heading for a recession, German factories are still struggling, indicating that trade tensions have left their mark on factory output especially in the Eurozone. In March, factory activity fell at its fastest pace in six years in the 19-country bloc.
With Germany's traditionally strong economy clearly feeling the weight of external pressures, Royston Carr Asset Management analysts say some are calling for tax cuts to help bolster economic growth.