ifo: Business climate falls in December

Sentiment among companies in Germany has deteriorated once again. The ifo Business Climate Index fell to 87.6 points in December, down from 88.0 points in November. Companies are more pessimistic about the first half of 2026, while their assessment of the current situation remained unchanged. The year is ending without any sense of optimism.

In manufacturing, the index fell. Almost all sectors were affected. This development was driven by more pessimistic expectations. Assessments of the current situation were slightly better, albeit at a low level. The number of new orders declined, and companies are planning to scale back production.

Advert

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 business climate declined in in almost all service sectors. One exception is the restaurant business, reporting a very strong December.

In trade, the index deteriorated. Assessments of the current situation have been revised downward. The outlook for the first half of the next year is also gloomy. Retailers were dissatisfied with Christmas sales.

In construction, the business climate remained unchanged at a low level. On the one hand, companies assessed the current situation as worse. On the other hand, they are less skeptical about the coming months.

More information: www.ifo.de

ifo Institut für Wirtschaftsforschung e.V., München