German business confidence rose for the third consecutive month in March, a key survey released Wednesday (March 26) showed, adding to hopes that Europe's biggest economy will be able to withstand the fallout from slowing global growth.

Despite a surging euro, a fresh outbreak of share market turmoil and high oil prices, the Munich-based Ifo economic institute said its monthly index of 7,000 German executives rose to 104.8 points this month from 104.1 in February. The index stood at 103.4 in January.

Analysts had expected the closely-watched index would drop to 103.5 points in March in the face of the international economic uncertainty unleashed by the US mortgage market crisis.

"These results indicate that since the beginning of the year the German economy has gained strength," said Ifo chief Hans-Werner Sinn in releasing the survey.

"Despite the strong euro (manufacturing) firms are more optimistic regarding exports than they were in February. Their hiring plans indicate that the increase in staff levels will continue in the coming months," he said.

The surprise increase in the March Ifo index will also help the Frankfurt-based European Central Bank to resist pressure to follow the lead of the world's other major central banks and cut rates.

The March increase in the index came in the wake of a record profit year for corporate Germany with the nation's chief executives saying they expect another bumper round of earnings in 2008 as the country's leading business sectors benefit from the boom in the world's leading emerging economies.

Germany's key engineering and electronics employer group Gesamtmetall said earlier this week that rising orders has resulted in job creation in the key export sector growing at its fastest pace in 40 years.

The rise in the March Ifo index followed an increase in both the survey's gauge measuring the current economic climate in Germany and the nation's business prospects for six months down the track. (dpa)