German business confidence hits new record high

German business confidence is at a record high, according to the Ifo Institute for Economic Research, whose monthly index released on Monday beat the previous record of 114.6 points in May to reach 115.1 in June.

German businesses see the business climate in the country as significantly improved and are even more optimistic about the coming six months, Ifo said.

"There are high spirits among German executives," Ifo President Clemens Fuest said. "Demand and order books have both progressed very well. Production plans remain focussed on expansion."

In the wholesale sector, the business confidence index was at its highest since 2010. "Retailers were [also] significantly happier with their current business. Expectations were at their most optimistic since September 2015," Fuest said.

Only the construction sector corrected its confidence prognosis "from high to slightly below that."

Because of the healthy order books, it was expected that prices would rise in the coming half-year.

Last week Ifo raised its forecast for growth in the German economy for 2017 to 1.8 per cent and 2 per cent for 2018 based on rising consumer demand, construction activity and exports.