Investor sentiment in Germany rose unexpectedly in November on expectations that price pressures will ease at the start of next year and growth will pick up in Europe's largest economy, a survey shows.

The ZEW economic research institute said its economic sentiment index increased to 31.7 from 22.3 points in October. A Reuters poll had forecast a fall to 20.

"Financial market experts are more optimistic about the coming six months," ZEW President Achim Wambach said in a statement.

A fall in a current conditions index to 12.5 from 21.6 - compared with a consensus forecast for 18 - showed investors expected that supply bottlenecks and inflationary pressures would hold back the economy in the current quarter, he said.

"For the first quarter of 2022, they expect growth to pick up again and inflation to fall both in Germany and the euro zone," Wambach added.

Supply bottlenecks for raw and preliminary materials have weighed down industrial production in Germany. Exports fell for a second consecutive month in September.

German consumer goods group Henkel trimmed its full-year earnings outlook earlier this week, saying it could not fully compensate for a spike in raw materials prices.

Infineon, which gets around 40% of its sales from the automotive sector, expects the supply of crucial semiconductors to remain tight well into next year, its chief executive Reinhard Ploss said today.

But despite the bottlenecks, German retailers expect Christmas sales to rise 2%, the HDE industry association said yesterday.