FRANKFURT (Bloomberg) — German business confidence increased for a fifth month in March, adding to signs that Europe’s largest economy is back in position as the region’s economic powerhouse.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, advanced to 107.9 from 106.8 in March.
The report comes a day after a survey showed growth in manufacturing and services accelerated to the fastest in eight months in March, adding to evidence the economy is well over a slump in the middle of last year. That’s helping the 19-nation euro area gather strength at a time the European Central Bank adds further stimulus with its 1.1 trillion euro, or $1.2 trillion, bond-buying program.
There is “hope of somewhat stronger economic growth in the spring” in the euro area, said Christoph Weil, an economist at Commerzbank AG in Frankfurt. “Lower energy prices and the weak euro appear to be having an effect,” and the ECB is “set to continue its government-bond buying program as planned,” he said.
The Frankfurt-based central bank said Monday it settled 26.3 billion euros of public-sector bond purchases in the first two weeks of its quantitative-easing plan. ECB president Mario Draghi has pledged to buy a total of 60 billion euros of assets a month through September 2016 to stave off the threat of deflation in the currency bloc.
“A sustained recovery is taking hold,” Draghi said on March 16. “We can rightly be optimistic about the outlook.”
Greece remains the major threat looming over the economy, with European officials awaiting a set of economic policy proposals from the government in return for emergency aid. Greek Prime Minister Alexis Tsipras’s government may submit a comprehensive list of measures by the end of the week.
The Bundesbank said Monday that German output probably increased “sharply” this quarter after a “surprisingly strong expansion” at the end of 2014. A Purchasing Managers Index for the manufacturing and services industries in Germany rose to 55.3 in March from 53.8 in February, according to Markit Economics. A similar gauge for the euro region advanced to 54.1 from 53.3.