German Business Confidence Up But Economy Slowing: Ifo

Germany business confidence rose slightly in March from February's level, according to a widely followed survey that also signaled the euro zone's No. 1 economic engine is losing momentum.

The Ifo Business Climate Index, a key business confidence report from one of the largest think tanks in the country, rose 0.1 to 109.8, up slightly from 109.7 in the previous month and exceeding analyst expectations of 109.6, as compiled by Bloomberg News.

The German economy is losing some of its momentum, Ifo said in a statement.

Although the index is at its highest since July of last year, the March increase was smaller compared to increases in January and February when confidence jumped after the European Central Bank took unprecedented steps to calm the region's sovereign debt crisis.

The business cycle in Germany is not improving as fast as some people would like it to, Kai Carstensen, an economist with the German think tank, told The Wall Street Journal.

Although the overal survey was fractionally higher, key components were lower. Manufacturers' confidence was less favorable compared to the previous month. Cartensen attributed the decrease to slowing economic growth in India, China and Germany's euro zone neighbors.

Confidence also fell for construction and wholesaling.

Retailers' confidence, meanwhile, rose sharply from the previous month.

The domestic economy is shielding Germany somewhat from the external turmoil, said Andreas Scheuerle, an economist at Dekabank in Frankfurt, according to Bloomberg.