German business confidence has slipped back after five consecutive months of increases.
Ifo institute statement
The Ifo institute said its index of business sentiment in Europe's biggest economy eased back to 105.6 points in May from a 15-year high of 105.9 in April. However, the figure was still better than an expected fall to 105.0.
"The outlook for further economic recovery still remains positive overall," Ifo said in a statement.
"The current situation was again appraised more positively by the firms, but their expectations for the coming six months were somewhat more cautious than in the preceding survey," it said.
A portion of the index measuring current conditions rose to 107.3 points from 106.4. However, the section measuring managers' six-month outlook dropped to 104 from 105.5.
Ifo's statement did not detail reasons for the dip in its own index, but it said that the business climate in manufacturing industry cooled slightly, while it was largely stable in the construction and retail sectors.
Business, investor and consumer confidence surveys all rose after Chancellor Angela Merkel's left-right "grand coalition" took office in November, pledging to tackle high unemployment and cut Germany's budget deficit.
However, opposition and business leaders increasingly have questioned whether some of its policies - in particular a plan to raise value-added tax paid by consumers to 19 from 16 percent - could damage the economy.
Germany has suffered from years of slow growth, causing chronically high unemployment and a cash crunch for the country's generous welfare state while holding back growth across the continent.
However, an enduring boom in exports and positive signs from the slumbering domestic economy have underlined prospects of a recovery.
The German economy grew by 0.4 percent in the first quarter after grinding to a halt in the last quarter of 2005. The government is forecasting 1.6 percent growth for the full year.