German Business Climate Steady In November: IFO

German business morale remain unchanged in November, a survey showed on Thursday, suggesting company executives are still optimistic about the growth prospects for Europe's largest economy despite growing political uncertainties.

The Munich-based Ifo economic institute said its business climate index, based on a monthly survey of some 7,000 firms, was unchanged at 110.4 in November after a slight downward revision to 110.4 from 110.5 previously reported in October.

The business climate indexes in wholesaling, retailing and construction all rose. Especially in the sector of construction, the index once again reached a new record high.

However, the index in the manufacturing sector fell. An increased number of companies intend to raise prices in the near future.

Business confidence in the services sector improved, with the indicator up to 34.8 points in November from 32.3 the month before.

The Ifo said companies gave significantly more favourable assessments of the current situation. Their expectations for the coming months, however,were downgraded slightly.

The sub-index for manufacturing edged down to 14.7 from 16.4 but the construction index rose to 11.4 from 10.3.

Pantheon Macroeconomics said that the overall survey continues to suggest German gross domestic product will rebound in the fourth quarter to about 0.4% quarter-on-quarter, accelerating from a poorly 0.2% quarter-on-quarter growth rate in the third quarter.

"The details show that the services index increased further to 34.8 in November from 32.3 in October, indicating that domestic demand growth remains solid’’. Elsewhere, the manufacturing sub-index fell back modestly, but construction sentiment increased further indicating that GDP will see a big boost from building capex in Q4. Finally, confidence in both the retail and wholesale sectors also rose."

"The economic upturn in Germany remains intact. The German economy seems to be unfazed by the election of Donald Trump as U.S. president," Ifo president Clemens Fuest commented.

The Ifo Business Climate Index, considered the most important barometer for the German economy, is based on about 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing.

EUR/USD was trading at 1.0557 from around 1.0556 ahead of the release of the data, while EUR/GBP was at 0.8493 from 0.8494 earlier.