The latest survey of German companies shows they do not seem particularly worried by the eurozone’s debt problems and the slowdown that comes with austerity measures.
Business sentiment rose sharply in December — the second month running that has happened — in stark contrast to the rest of Europe.
Hans-Werner Sinn, head of the Ifo Institute, which carried out the survey of 7,000 firms said certain sectors are particularly buoyant: “Construction is doing great, retail fine, and even the manufacturing sector is slightly up. This is amazing given the global downward trend.”
Economic growth will however slow considerably next year according to experts at Germany’s central bank.
They expect the economy to grow by just over half a percent in 2021, down from three percent this year before recovering in 2013 to 1.8 percent.
So a slowdown but not a slump in the eurozone’s key growth motor.
And there are already signs of that as German manufacturing contracted for a third straight month in December and exports posted their biggest fall in October in half a year.
Though the hope is that domestic demand and well as exports to emerging markets, like China, will support the recovery.