ifo: Business Climate Rises in October 2025

Sentiment among companies in Germany has improved. The ifo Business Climate Index rose to 88.4 points in October, up from 87.7 points in September. This was due to improved expectations for the coming months. However, the current business situation was assessed as slightly worse. Companies remain hopeful that the economy will pick up in the coming year.

In manufacturing, the index rose. Expectations in particular brightened. However, companies were less satisfied with current business. The decline in new orders has come to a halt. Capacity utilization rose by one percentage point to 78.2 percent, but remains well below the long-term average of 83.3 percent.

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In the service sector, the climate improved significantly. Service providers were less skeptical about the coming months. The current situation was revised slightly upward. Sentiment in tourism and IT services improved in particular.

In trade, the business climate brightened. This was due to less pessimistic expectations, particularly in wholesale. However, the current situation was assessed as somewhat worse.

In construction, the index declined slightly. While the current situation was assessed as noticeably better, expectations were more pessimistic. A lack of orders remains a key problem for the industry.

More information: www.ifo.de

ifo Institut für Wirtschaftsforschung e.V., München