Following a slump experienced in March and April, the sentiment among German companies has shown a slight recovery. The Ifo Business Climate Index rose to 84.9 points in May, up from 84.5 points in April, according to the Ifo Institute on Friday. Companies expressed slightly greater satisfaction with their current operations, and the outlook for the coming months is less pessimistic. While the German economy is stabilizing for now, the situation remains fragile.
In the manufacturing industry, the business climate improved somewhat, primarily due to more positive assessments of the current situation. However, expectations continued to dim, and the number of new orders decreased.
The service sector saw a significant jump in the index. In particular, expectations recovered after the sharp drop seen in the previous two months, and companies also rated their ongoing business performance slightly better. Sentiment in logistics remains tense, though it is no longer as catastrophic as in the preceding month. Tourism is experiencing a similar trend of cautious improvement.
In retail, the business climate has risen again, as companies showed greater satisfaction with the present circumstances and pessimism regarding future expectations lessened somewhat. Nevertheless, the situation remains challenging for both wholesale and retail sectors due to persistent consumer reluctance to spend.
Meanwhile, the construction industry saw a slight downturn in business climate, attributing this to a poorer assessment of the business situation. Although expectations rebounded somewhat from the previous month’s drop, companies remain skeptical.
