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Survey: German business optimism up despite pandemic burdens

A man walks on a small path in front of the banking district in Frankfurt, Germany, early Saturday, Feb. 20, 2021. (AP Photo/Michael Probst) (Copyright 2021 The Associated Press. All rights reserved)

FRANKFURT – Optimism rose among German businesses in February, according to a closely watched survey - despite a worrisome flattening out in the decline of infections.

The index of business sentiment compiled by the Ifo institute showed that industry continues to hold up better than public-facing services during the pandemic, even as battered tourism businesses expressed cautious optimism about the upcoming vacation season.

The survey index for Europe’s largest economy climbed to 92.4 points after a reading of 90.3 points in January, the institute said in a news release Monday.

The results show brightening outlooks among thousands of German businesses, particularly in manufacturing and industry, where the index rose in all important sectors. Retailers were somewhat less pessimistic than the month before, despite collapsing sales. For hospitality businesses such as hotels and restaurants, “the situation remains difficult,” the Munich-based institute said, while “in the tourism sector there is cautious optimism again regarding the vacation season.”

The outlook brightened despite caution from German Health Minister Jens Spahn, who on Friday noted that infection numbers have stopped declining in recent days. Elementary schools and kindergartens reopened in 10 of the 16 German federal regions on Monday but widespread restrictions on business activity remain in force. Manufacturing businesses such as the auto industry, a major employer, have been able to cope better with anti-pandemic measures than companies that depend on face to face contact with customers.