Business sentiment in Germany experienced a slight uptick in August, according to recent data released by the Ifo Institute. The Ifo Business Climate Index rose to 89.0 points, from 88.6 points in July, exceeding expectations of a more modest increase.
The improvement is primarily attributed to a rise in companies’ expectations for the future. However, assessments of the current business situation remain subdued, indicating a fragile recovery for the German economy.
Within the manufacturing sector, the index recorded a slight decline. Companies expressed somewhat less satisfaction with current business conditions and future expectations were marginally lowered. There’s currently no significant improvement evident in new orders. However, manufacturers of capital goods did report a noticeable boost in sentiment.
The service sector saw a mixed picture, with a deterioration in overall climate. Although current business conditions were assessed more favorably, expectations for the coming months proved more pessimistic. Architecture and engineering firms, however, bucked the trend, reporting an improvement in their business climate.
In the retail sector, the business climate index fell, driven by weaker current business performance. Future expectations registered a slight lessening of negativity.
Finally, after many months of gains, the index for the construction sector eased slightly. Companies reported diminished satisfaction with the current situation, although the outlook for the coming months showed some improvement.
