German business confidence rises

German business confidence posted a surprise rise in March, a closely-watched survey has indicated, the third monthly increase in a row.

The Ifo Institute's business climate index rose to 104.8 points, suggests that German business sentiment is proving resilient to market jitters.

The reading is up from 104.1 points in February, and analysts had expected a decline to 103.4 this month.

Manufacturers and construction firms saw the biggest rise in confidence.

Sentiment in the retail sector fell back slightly after a sharp increase in February.

'Brightened outlook'

"The results indicate that with the beginning of the year the German economy has gained strength," said Ifo president Hans-Werner Sinn.

"In Germany, the engine is obviously ticking over all right"
Dresdner Kleinwort economist Rainer Guntermann

"The outlook for the coming six months has also brightened somewhat."

The Ifo questions 7,000 companies across German for its monthly business climate index.

"It is clear that the risk factors which are rattling the economy - concerns about a recession in the US, the exchange rate and other things - are leaving little trace on industry," said Dresdner Kleinwort economist Rainer Guntermann.

"In Germany, the engine is obviously ticking over all right."

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