The Ifo Business Climate Index for industry and trade in Germany rose to 107.7 points in May from 106.7 points in April, the research institute Ifo reported on Wednesday.
According to the Munich-based think tank, companies are significantly more satisfied with their current business situation. Meanwhile, they are noticeably more optimistic about the coming months.
The business climate indices in four main sectors have all improved. The climate in manufacturing has improved for the third consecutive month, and the indices in wholesale and retail have risen after a decline in April. The index in construction even rose to a new record high since 1991.
"The German economy is growing at a robust pace," Ifo president Clemens Fuest said.
The Ifo Business Climate Index, considered the most important barometer for the German economy, is based on about 7,000 monthly survey responses from firms in manufacturing, construction, wholesaling and retailing.
