Optimism among German business leaders remained strong moving into 2018, according to the latest survey by influential economic institute IFO, although prospects in the months ahead were more clouded.
The IFO main business climate index rose to 117.6 points in January, from 117.2 in December, beating expectations of a dip back to 117.1.
Business managers were particularly optimistic about the current economic situation, pushing the index to a new record high.
The current assessment index rose to 127.7 in January, up from 125.5 in December and beating expectations of a dip to 125.4.
In manufacturing, the IFO data confirmed recent purchasing manager sentiment, and rose to a new record high. On the less-optimistic side, construction sentiment edged downwards - less optimistic about their business in the months ahead.
Business managers were also slightly less enthusiastic about the prospects lying ahead, but sentiment remained at historically high levels.
The expectations sub index dipped to 108.4 in January from 109.4 in December and missed expectations that the index would remain at 109.4.
"The dip in expectations is the key to watch," said Claus Vistesen at Pantheon Macroeconomics.
"These are strong data consistent with robust GDP growth, but the divergence between weakening expectations and a rising current assessment index tends to be a reliable signal for slowing economic momentum," he added.
Carsten Brzeski, economist at ING, said: "The big question in the course of 2018 will be whether less monetary policy accommodation – on the back of a stronger euro and higher long-term interest rates – can be offset by the recent upswing of the eurozone economy and the general strength of the global economy."
The euro was higher against the dollar by mid morning in Europe. The single currency rose 0.15% to $1.2426.
Germany's Xetra Dax, however, was down 0.11% to 13,398.