(MENAFN- AFP) German business confidence defied predictions to climb to a new two-year high in October, the Ifo economic institute said Tuesday.
The Munich institute's headline business confidence index hit 110.5 points in October, up one point from the September reading of 109.5 and the highest level since April 2014.
Business people's mood beat the forecasts of analysts surveyed by Factset, who had predicted the indicator would remain flat.
"The upturn in the German economy is gathering impetus," Ifo president Clemens Fuest said in a statement.
Sub-indexes measuring businesses' opinion of the current economic situation and the outlook for the coming six months both rose.
Expectations saw an especially strong surge, reaching 106.1 points -- an increase of 1.6 points over September's figure.
Both the manufacturing and construction sectors were confident about the future, with building firms' expectations hitting a new record high.
Retailers' mood was largely unchanged from September, while wholesalers' view of both the current climate and the coming months darkened slightly.
On the back of a string of positive data, the Ifo reading "suggests that the German economy continued to perform well in the second half of 2016," Jennifer McKeown of Capital Economics said.
But she pointed to a likely slight slowing of growth in Europe's economic powerhouse in 2017, as inflation begins to weigh on consumer spending.
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