German business sentiment rose in November to its strongest level since 1991, a survey showed on Wednesday, highlighting a rift in the eurozone as the bloc's largest economy leaves smaller states behind. The Munich-based Ifo think tank said its business climate index, based on a monthly survey of some 7,000 firms, rose to 109.3 from an upwardly revised reading of 107.7 in October, confounding expectations for a slight fall.
"The numbers confirm that the German economy is in very healthy shape and that it will probably continue to grow solidly and at a rate above the euro zone average in the coming quarters," said Aline Schuiling from ABN Amro. The euro rose after the release of the data - which beat even the highest forecast in a Reuters poll of 40 economists - before giving up its gains and falling.
With both the current conditions and the business expectations indexes in the survey surpassing the consensus view, the headline figure landed at its highest level since survey data was first collected for a reunified Germany. The business expectations index, which measures the outlook six months down the road, also hit its highest reading on record, further reinforcing the impression Germany was in the clear of problems affecting some of its eurozone partners.
"The German economy is returning much faster to its pre-crisis level than many had expected," said Carsten Brzeski, economist at ING Financial Markets Germany's strong recovery has helped pull the eurozone to improved growth in recent quarters, but there are also concerns it may be leaving other struggling economies behind.