German firms remain pessimistic about business prospects for the year ahead

<ul><li>Only 13% of companies expect business to improve in the next 12 months</li><li>35% of companies expect a deterioration in business conditions instead</li><li>But current business situation is assessed more positively (30%) than negatively (21%)</li><li>51% of companies see current economic policy as a problem for their own development</li></ul><p>That last point stands out in my view as it means German firms are seeing added risks to their businesses stemming from policy itself i.e. tightening credit and financial conditions. That's not a good outlook for investment prospects as well. Besides that, companies are reporting that they are still worried about high energy and raw material prices and subdued domestic demand.</p>

This article was written by Justin Low at www.forexlive.com.