German business sentiment stalls despite slight rise in expectations

The business climate in Germany saw hardly any movement over the course of 2025 and remains significantly below the figures in previous years, according to ifo institute. From January to November, the index only rose by around 2.8 points overall, which is practically tantamount to a standstill. The business situation scarcely changed (minus 0.4 points), while expectations rose slightly over the course of the year (plus 5.9 points).

The business climate in industry has improved noticeably since the start of the year. Nevertheless, almost all sectors remain in negative territory and are still predominantly pessimistic about the future, ifo said in a press release.

Germany’s business climate showed minimal improvement in 2025, rising only 2.8 points from January to November, according to the ifo institute.
While expectations improved, most sectors remained pessimistic, with chemicals seeing the sharpest decline.
Trade sentiment stayed weak, though warehousing improved.
Despite slight industrial gains, businesses remain cautious.

Sentiment in the chemical industry deteriorated particularly in October and November. Overall, the indicator fell by 8.6 points.

“Companies are taking a sober and concerned view of economic development,” said Klaus Wohlrabe, head of ifo Surveys. “We are seeing a stabilisation of the business climate driven only by expectations, and the euphoria from the start of the year has already faded again.”

Sentiment in trade recovered somewhat but remained at a very low level at the end of the year and was worse overall than in previous years. Sentiment in warehousing and storage improved significantly by 13.1 points.

“Overall, it is evident across all sectors of the economy that it would be wrong to speak of a recovery,” added Wohlrabe.

Fibre2Fashion News Desk (SG)