Gokhan Ergocun
25 August 2026•Update: 25 August 2026
German business sentiment improved in August as companies grew more satisfied with their current situation and revised their expectations upward, research institute ifo Institute reported on Tuesday.
The ifo institute's Business Climate Index climbed to 88.8 points in August, up from 86.7 points in July.
The index measuring current business conditions rose to 88.5 points in August from 86.5 points in the previous month, while the expectations indicator advanced to 89.1 points from 86.8 points.
Despite another increase in energy prices, the German economy is showing signs of recovery while business uncertainty continues to decline, according to the Munich-based institute.
In manufacturing, the business climate index rose noticeably as managers assessed their current situation as significantly better and anticipated production increases over the next three months.
The service sector also posted an improvement in business sentiment with brightened expectations, although transportation and logistics providers continued to face a difficult environment.
Trade indicators picked up due to higher satisfaction among retailers and a significant boost in wholesale sentiment.
In construction, the index increased on the back of noticeably less pessimistic expectations, even as companies assessed their current situation as slightly worse.
