February 7, 2018 / 8:41 AM / 10 months ago

German economy to grow by 2.7 percent this year: DIHK

FILE PHOTO: A construction site at the river Spree is pictured in Berlin, Germany November 27, 2017. REUTERS/Hannibal Hanschke/File Photo

BERLIN (Reuters) - Germany’s DIHK Chambers of Industry and Commerce raised its 2018 growth forecast for the German economy to 2.7 percent from 2.2 percent, it said on Wednesday, pointing to a broad-based upswing in Europe’s biggest economy which is gaining more pace.

“Companies have never been more upbeat,” DIHK said in its latest business survey which showed business morale improved further at the beginning of 2018.

German companies are hiking investment plans at an unprecedented pace as many reach capacity bottlenecks and a lack of skilled labour threatens to choke off more growth, DIHK said.

According to the DIHK survey of 26,000 managers, business morale regarding current conditions reached a record-high as 54 percent of firms reported good conditions, 40 percent said things were satisfactory and 6 percent said things were bad.

Asked about the biggest threat for future growth, most companies pointed to shortages of skilled labour and rising labour costs. “The shortage of skilled labour is turning into a real obstacle for future growth,” DIHK said.

Reporting by Michael Nienaber,

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