German economic sentiment has brightened markedly to reach the highest level for almost four years, as companies reap the benefits of restructuring and consumers regain confidence, a European Commission survey showed yesterday.
The upbeat results shown in the Commission's "economic sentiment" data for January underlined the pace of change in the euro-zone's largest economy.
German gross domestic product growth remains sluggish but Mr Thomas Mayer, economist at Deutsche Bank, said the survey reflected "the greater competitiveness of Germany industry and somewhat more confident consumers... it is not going to happen fast but we will see the start of a turnaround this year".
Germany's results failed to lift the gloom shrouding the overall outlook for the euro zone, however.
The Commission's survey showed economic sentiment across the zone rising slightly last month compared with December, but remaining below November's level.
Confidence in the euro-zone industrial sector fell to the lowest level since May last year, while sentiment in construction also deteriorated.
The fragility of the euro-zone recovery is expected by economists to result in the European Central Bank leaving its main interest rate unchanged at 2 per cent for the 20th month running at its meeting on Thursday.
The Commission's economic sentiment index for Germany rose from 96.8 in December to 98.4 in January - the highest level since May 2001 - with the mood improving particularly in the consumer sector and in the retail trade. - (Financial Times Service)
