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BERLIN (AP) — A closely watched survey shows German business optimism hit a new record high in October, buoyed by a strong economy.

The Munich-based Ifo institute said Wednesday its business climate indicator climbed to 116.7 points in October, from 115.3 points the previous month.

Ifo President Clemens Fuest says the figures show businesses believe “Germany’s economy is powering ahead.”

Businesses assessed their current situation as improving, with that figure rising to 124.8 points from 123.7 the previous month. Their expectations for the next six months rose from 107.5 in September to 109.1 in October.

The index is based upon about 7,000 survey responses from firms in manufacturing, construction, wholesaling and retailing.

Germany’s economy is expected to grow by as much as 2 percent this year amid record-high employment and rising real wages.