German business confidence rose unexpectedly, indicating that the country’s robust economy will be able to withstand the effects of Volkswagen AG’s (ETR:VOW3) emission scandal and a global economic slowdown.
In November, the ISO Institute business climate index jumped 109 from 108.2 in October. Economists were expecting the measure to remain unchanged. According to ISO, the terror attacks in Paris did not impact the survey data negatively.
German businesses are facing a slowing global economy, the refugee crisis, a scandal involving the country’s largest carmaker, and the aftermath of the Paris attacks. Despite all of this, the country still maintains record levels of unemployment and interest rates that support domestic demand. Further stimulus may be in the future as the ECB mulls over whether to ease monetary policy measures further.
Data released on Tuesday showed that economic growth in Germany during the last quarter was fueled by domestic consumption, as net trade continued to drag and investment contracted. Private spending was up 0.6% over the last three months. Exports jumped 0.2%, while imports increased 1.1%. Capital investments declined 0.3%. The economy overall expanded 0.3% for the month of November.
Economic activity in the country accelerated in November, with a number of services reaching their highest level since September of last year. Manufacturing is also advancing.