By Nina Adam

FRANKFURT--German business sentiment picked up markedly in February, as companies' raised their outlook for the next six months.

The Ifo institute said Wednesday that its widely watched business climate index rose to 111.0 points from 109.9 points in January. Economists polled by The Wall Street Journal had forecast a slight decline to 109.5 points.

"Germany's economy is back on track, after making a cautious start to the year," said Ifo President Clemens Fuest, commenting on the think tank's monthly survey of around 7,000 companies.

Companies' assessment of their current situation hit the highest level since August 2011, the Ifo institute added.

Europe's largest economy picked up speed in the fourth quarter of 2016 and is expected to grow solidly in the first few months of 2017.

However, many economists caution that heightened uncertainties about future trade relations with the U.K. and the U.S. and the risk of rising anti European Union-sentiment ahead of key elections in Germany, France and the Netherlands could weigh on economic activity later in they year.

Write to Nina Adam at nina.adam@wsj.com

(END) Dow Jones Newswires

February 22, 2017 05:15 ET (10:15 GMT)

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