A closely followed survey of German companies – the driving forces behind Europe’s largest economy – has registered a stronger-than-expected rise in business confidence for May.

The west German business climate index of the Ifo economics institute rose to 91.5, bouncing back from a slight dip in April’s reading (90.5) to reach the same level as March. Analysts had been expecting a more modest figure of 90.8.

The rise, attributed to a recovery in the manufacturing sector, reflects increases in the barometers both for the current situation (from 77.0 to 77.6) and business expectations (104.7 to 106.1).

However, Ifo economist Gernot Nerb cautioned that German business still had some way to go to return to full strength: “The economic engine is only running on two cylinders,” he said, “the others haven’t sprung into action yet.”

Data sourced from: BBC Online Business News (UK); Ifo; additional content by WARC staff