German business confidence continued to climb in December, a key institute's report indicated Wednesday, after bouncing back from a long slide the month before despite the shaky eurozone economy.
The Ifo institute's closely watched business climate index for Europe's top economy rose to 102.4 points in December from 101.4 points a month earlier, beating analysts' expectations.
Economists polled by Dow Jones Newswires forecast a score of 102.0 points.
"While companies assessed their current business situation as somewhat less favourable than last month, they were considerably less pessimistic about future business developments," the Munich-based institute said.
"As the year draws to a close, German companies are more confident about the future."
The survey found that the mood was particularly bright in manufacturing and construction but soured slightly in wholesaling and retailing.
Ifo calculates its headline index on the basis of companies' assessments of their current business and the outlook for the next six months.
The sub-index measuring current business dropped to 107.1 in December from 108.1 points in November, but the outlook sub-index jumped to 97.9 points from 95.2 points.
Last month the business climate index rebounded after a six-month nosedive propelled by deep uncertainty in the euro area.
Unlike many of its neighbours, Germany has shown strong resistance to the debt crisis that has swept through the 17-country bloc, relying on its powerful export motor to keep the economy humming.
But weakness in the eurozone has begun to take its toll.
After expanding by 0.5 percent in the first quarter of 2012, gross domestic product (GDP) grew by just 0.3 percent in the second quarter and a mere 0.2 percent in the third quarter.
The Bundesbank said Monday that the German economy was set to contract "noticeably" in the fourth quarter of this year and will probably tread water early next year, when the country goes to the polls in a general election.