German investor confidence rises strongly

[April 20, 2010]  BERLIN (AP) -- German investor confidence rose strongly this month as healthy industrial orders and exports buoyed sentiment, a closely watched survey showed Tuesday.

The ZEW institute's index, which measures investors' outlook for the next six months, rose to 53 points in April from 44.5 in March. That was well above economists' forecasts of a slight increase to 45.1 and far above the indicator's historical average of 27.3.

"The financial market experts' positive expectations seem to have been decisively reinforced by the recent increase in exports and stable incoming orders," ZEW said in a statement.

Government data have shown that industrial orders surged in January and held steady in February, buoyed by increasing foreign demands.

ZEW said investors' view of the current economic situation also improved in April. An index measuring that assessment rose by 12.7 points in April to minus 39.2.

Germany returned to modest economic growth in last year's second quarter after a deep recession, though it stagnated in the fourth quarter.

Alexander Koch, an economist at UniCredit in Munich, noted that "the latest news is definitely not encouraging at all, underscoring that the impediments for a sustained solid upswing remain ample."

He pointed to the disruption to air traffic caused this week by the volcanic ash cloud and the continuing Greek debt crisis, among other things.

"But this cannot cloud the overall favorable short-term outlook for the global economy and the German export industry," Koch added.

The economy is widely believed to have contracted in the first quarter, when severe winter weather weighed on activity in the construction sector and elsewhere.

However, "the stronger the statistical setback in the first quarter, the stronger the rebound should turn out in spring," Koch said.

ZEW said 294 analysts were surveyed from March 29 through April 19 for the survey.

[Associated Press]

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