Business confidence in Germany rose to a 7-month high with hopes of recovery.

Sentiment among businesses in Germany rose strongly in March, supported by renewed momentum in the manufacturing sector and expectations of fiscal stimulus to improve the economic outlook.

The ifo business climate index rose from 85.3 points in February to 86.7 points in March, the highest in seven months, and broadly in line with expectations.

The improvement is evenly split between current assessments and future expectations. The ifo expectations indicator - a key barometer - rose to 87.7 points, marking an eight-month high.

The ifo current situation indicator rose from 85.6 in February to 87.7 in March, also in line with forecasts.

"Sentiment among companies in Germany has improved," Clemens Füst, president of the ifo institute, told Euronews.

"Companies are more satisfied with their current business situation and their expectations have risen noticeably. German businesses are hoping for a recovery," he added.

In industry, sentiment improved markedly, with expectations becoming significantly less cautious. Firms also viewed the current situation more favourably, although orders were down slightly. In the service sector, business confidence also improved. Firms expressed a more positive outlook and a clearer sense of optimism, particularly among architectural and engineering firms.

In the trade sector, sentiment strengthened again. Traders were more optimistic about future prospects and assessed their current business situation more positively. In the construction sector, a more optimistic mood was observed. Firms have a slightly better view of current conditions and expectations are improving, although scepticism remains high. However, persistent order shortages continue to weigh on the industry. | BGNES