2017.07.2508:22:00UTC+00German Business Sentiment Hits Record High

German business confidence strengthened further to a fresh record high in July as companies became more satisfied with their current situation amid the improving business outlook.

The business confidence index rose to 116 in July from a revised 115.2 in June, survey data from the Ifo Institute showed Tuesday. The score was forecast to fall to 114.9.

Likewise, the current business situation index of the survey reached its highest level since the German reunification. The measure climbed to 125.4 in July, while it was expected to fall to 123.8 from 124.2 in June.

The expectations index rose unexpectedly to 107.3 from 106.8 in the previous month. The forecast for July was 106.5.

Germany's economy is powering ahead, Ifo President Clemens Fuest said.

Among sectors, business confidence in manufacturing hit a new record high as assessments of current situation scaled unprecedented heights. Moreover, manufacturers expressed greater optimism about the short-term future.

In wholesaling, business climate improved again on the back of far more optimistic business expectations. By contrast, assessments of the current situation edged downward.

While business confidence in retailing dropped in July, confidence in the construction sector climbed to a new record high.

However, the Ifo is unlikely to continue its surge over the long-term, Marco Wagner, a Commerzbank analyst said. The current euphoria of the companies surveyed by the Ifo Institute is not supported by hard data, Wagner added.