Germany Business Confidence

Germany’s ifo Business Climate Index rose to 89 in August from 88.6 in July, the highest level since May 2024 and above forecasts of 88.6. Companies’ expectations for the coming months improved (91.6 vs 90.7), while assessments of the current situation declined slightly (86.4 vs 86.5), reflecting a still-weak economic recovery. In manufacturing, sentiment fell marginally (-12.2 vs -11.9), with firms less satisfied with current conditions and no growth in orders, though capital goods manufacturers showed notable optimism. The service sector saw a slight decline despite better current conditions (2.6 vs 2.8), as expectations turned more cautious, though architecture and engineering firms were more positive. Trade sentiment weakened (-21.4 vs -20.3) due to poorer performance, even as future expectations became slightly less pessimistic. Construction showed a minor drop after months of stability (-15.3 vs -14.3), with lower satisfaction now but an improved outlook for the months ahead.