Business is getting back on track

The influential Ifo index rose to 96.8, its eighth straight monthly advance and the highest level since January 2001.

A pick up in the US and increasing demand in Asia are having a positive impact, economists said.

Finance minister Hans Eichel last month said the world recovery meant future German economic prospects were good.

It seems that German business leaders are starting to agree that things are finally looking up.

Less failures

Germany's economy has dipped in and out of recession in the last three years, shrinking by 0.1% in the second quarter, and 0.2% in the first three months of 2003.

The government has pushed through tax cuts to help kickstart the economy and is forecasting economic growth of 1.5% to 2.0% in 2004, up from zero this year.

The number of companies that failed in Germany fell for the first time in more than two years in August, according to the Federal Statistical Office.

The news came as the German central bank said industrial output grew by 0.2% in September from August, instead of contracting 1.2% as first thought.

The Ifo survey, which polls over 7,000 business leaders, is widely respected as a reliable indicator of economic trends.