German business optimistic for 2001

"We expect a growth rate of 2.8 per cent next year after a plus of three per cent this year," IW director Professor Gerhard Fels said.

"We can expect to see a significant drop in the number of unemployed in western Germany. In the east it is expected to be weaker," Fels said pointing out that about half a million people more people would find jobs in 2001.

Traditional industrial sectors such as machinebuilding, electronics and chemicals would remain in a comfortable position for 2001.

The U.S. economy was slowing "but we have eastern Europe which is developing very nicely. We have Asia and oil countries, which have money again, including Russia," Fels said.

Business prospects in building and construction had worsened but sectors such as food and textiles had improved significantly, the institute said.

(kil/dpa)