Germany's business climate index declines in December

ISTANBUL

Germany's Ifo Business Climate Index fell to 87.6 points in December, extending its loss in the previous month.

The Ifo Institute for Economic Research published on Wednesday the results of its June Business Climate Index survey, which involved approximately 9,000 companies.

According to the results, the Business Climate Index for industry and trade, which stood at a downwardly revised 88 points in November, fell to 87.6 points this month.

The market expectation for the index was for it to increase to 88.2 points.

Germany's Ifo Expectations Index also decreased from 90.5 to 89.7 points, and the Current Situation Index stood stable at 85.6.

Ifo said that companies are more pessimistic about the first half of 2026, while their assessment of the current situation remained unchanged, adding that the year is ending without any sense of optimism.

It noted that confidence in the German manufacturing sector declined, with the number of new orders falling, and companies planning to scale back production.

"In the service sector, the business climate has fallen back into negative territory. Service providers were less satisfied with current business and reported lower expectations," the institute noted.

Ifo added that the business climate deteriorated in trade, as retailers were dissatisfied with Christmas sales, while in construction, the business climate remained unchanged at a low level.