By Brian Blackstone
FRANKFURT--German business sentiment unexpectedly increased in
November, a closely watched survey showed, suggesting Europe's
largest economy is slowly finding its footing after struggling to
expand in recent months.
The Ifo Institute said Monday that its monthly business
confidence survey rose to 104.7 from 103.2 in October, breaking a
string of six-straight monthly declines. Economists surveyed by The
Wall Street Journal had expected a reading of 103.
The survey's assessment of both current conditions and
expectations for the months ahead improved.
The report raised hopes that an easing of geopolitical tensions
in Ukraine and other parts of the world, which weighed on sentiment
in the summer and early autumn, would help to boost German exports
and investment. Germany accounts for about 30% of the eurozone's
gross domestic product, making its performance key to the rest of
the region, particularly with other large members of the bloc, such
as France and Italy, struggling with stagnation or recession.
"The downturn in the German economy has ground to a halt for the
moment at least," said Hans-Werner Sinn, president of the Ifo
Institute.
Germany's economy stalled in the spring and summer, with a
slight contraction in output during the second quarter offset by a
small increase in the third. Many analysts expect only weak growth
in the fourth quarter.
A separate business index released last week by data firm
Markit, which is based on a survey of purchasing managers, showed
business activity in Germany expanded last month at its slowest
pace in more than one year.
The Ifo report "supports our expectation that the German economy
is merely going through a soft patch," said Jörg Kraemer, chief
economist at Commerzbank, in a research note.
Mr. Kramer expects Germany's expansion to gather pace next year,
aided by falling oil prices and the recent depreciation of the
euro, which should aid the country's exporters.
Monica Houston-Waesch contributed to this article.
Write to Brian Blackstone at brian.blackstone@wsj.com