German companies are more confident about their prospects than at any time in the past five years, an influential survey has revealed.
German business confidence is growing
Satisfaction with the current business climate is at its highest since the end of 2000, according to research by the Ifo economic research institute.
Retailers and construction firms have seen growth in trade, while the outlook for exports has also improved.
The German economy is expected to continue its gradual recovery in 2006.
Key indicators have pointed to an upturn in Europe's largest economy after several years of weak growth.
Ifo's monthly economic report - which surveys 7,000 businesses about their current and future prospects - showed overall confidence had risen since December.
It also showed that firms were more hopeful about their prospects over the next six months than at any time since 1994.
"Doubts regarding the durability of the upswing, which has been observable since last summer, should be further dispelled by these results," said Hans-Werner Sinn, Ifo's chief executive.
"The upswing has gained in both breadth and momentum."
The German economy grew just 0.9% last year, down from 1.6% in 2004.