French industrial morale rose in September to its highest level since July 2011 and German business sentiment unexpectedly improved. But as David Pollard reports, German consumers are more worried about the outlook than before.
September in France means grape harvest. After a heatwave this summer, wine buffs hope for top-quality tipples. It's hardly been a vintage year for the economy - but even there there's something to toast. Survey data shows industrial morale - unexpectedly - at its highest level in four years. Italy too is reporting a healthy rise in industrial orders. But German industry, of course, has a scandal that's posing more questions than answers. Simon Derrick, Head of Global Currency Research, BNY Mellon. SOUNDBITE (English) SIMON DERRICK, HEAD OF GLOBAL CURRENCY RESEARCH, BNY MELLON, SAYING: 'At the moment, nobody knows. Every single report has the words 'could', 'maybe', 'perhaps'. The implications not just for VW but for the German industry overall is unknown, what happens to the supply chain is unknown, what it means for the car industry elsewhere is unknown.' The fallout from VW's emissions scandal is not factored into the latest economic readings for Germany. The IFO Business Climate Index perked up unexpectedly this month. The survey was, largely, carried out before the scandal broke. What it does show is one impact of the growing influx of refugees. IFO's Klaus Wohlrabe. SOUNDBITE (Germany) KLAUS WOHLRABE, SURVEY DIRECTOR, IFO, SAYING: ''The food and other goods the refugees get is being bought in supermarkets, so the current retail situation is good and retailers expect it to get even better in the coming months.'' German customers, though, are feeling more negative. Consumer moral declining for the second consecutive month, according to GfK. Record wage growth and bumper employment levels not enough to dispel worries over China, the survey shows, and over the possible impact of a flood of refugees.