Page last updated at 10:07 GMT, Monday, 25 May 2009 11:07 UK

German firms see optimism ahead

New VW cars wait to be loaded onto a ship
Demand for Germany's exports has dropped sharply

Firms in Germany, Europe's largest economy, are more confident now than they have been for six months, according to a key index.

The Ifo index climbed for the second month in a row to 84.2 in May from a reading of 83.7 in April. The measure was worse than forecast, however.

The survey suggests "a gradual stabilisation of economic output at a low level" said the group's head.

Other economic data has also implied a more positive outlook recently.

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The boss of EBM Papst, Hans Jochen Beilke
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Hans Jochen Beilke, head of EBM Papst

Earlier this month the Zew survey of investor sentiment rose to its highest level in almost three years in May, and Germany's purchasing managers' index climbed to its highest level in seven months.

Germany has been hit as the global slowdown has hit exports, a vital driver of its economy.

Some analysts say the Ifo survey, which reflects the views of 7,000 firms, implies the worst of the recession might be over.

"All in all, the survey results suggest that we are over the worst of this downturn," said Marco Bargel, an analyst at Postbank.

But not everyone is so positive.

"It can't be ruled out that we're seeing an expectations bubble, given the dimension of the current crisis"



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