German Economy Shows Signs of Improvement, But Challenges Remain

The mood in the German economy has improved. The Ifo business climate index rose to 86.9 points in October, after 85.8 points in September. The companies were somewhat more satisfied with current business. In addition, the managers are less pessimistic for the coming months. According to the institute, the German economy is once again seeing a silver lining on the horizon.

The business climate index rose slightly in the manufacturing sector. According to the Ifo Institute, this was due to companies’ less skeptical expectations. However, they rated the current situation worse again. The order situation remains difficult. In the service sector, however, the business climate has improved significantly. According to the Ifo Institute, companies were particularly satisfied with their current business. Expectations also increased, but are still characterized by doubts.

However, the index fell in trading. Traders revised their assessments of the current situation downwards and also looked more pessimistic about the coming months. This development was primarily driven by wholesalers, according to the Ifo Institute. In contrast, the business climate indicator in the construction industry increased slightly. The companies rated their current business situation slightly worse. Although slightly improved, the outlook for the coming months remains pessimistic, according to the Ifo Institute.