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German business sentiment rises slightly in July: ifo

28 Jul '25

1 min read

German business sentiment rises slightly in July: ifo

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Insights

Germany's ifo Business Climate Index rose slightly to 88.6 in July from 88.4 in June, reflecting modest improvement in sentiment.
Manufacturing sentiment improved, though incoming orders remained weak.
Capacity utilisation edged up to 77.2 per cent.
Trade sentiment declined due to pessimistic expectations.
Overall, the current situation index rose to 86.5, while expectations inched up to 90.7.

The ifo Business Climate Index edged up to 88.6 points in July, compared to 88.4 in June, indicating a slight improvement in sentiment among German companies. Companies were somewhat more satisfied with their current business situation, while expectations remained largely unchanged. The upturn in the German economy remains sluggish.

Manufacturing sentiment strengthened in July, with the balance improving from -13.9 to -11.8. Companies assessed their current situation as noticeably better, with expectations continuing to brighten. Yet, incoming orders still lack momentum, and capacity utilisation increased only marginally from 77 to 77.2 per cent, according to the ifo Institute.

“In trade, the index weakened somewhat due to more pessimistic expectations. Although the current situation improved slightly, it remained unsatisfactory,” said Clemens Fuest, president of the ifo Institute. The sector's balance declined to -20.2 in July from -19.2 in June.

Overall, the assessment of the current situation improved to 86.5 from 86.2, while business expectations edged up to 90.7 from 90.6, continuing their steady upward trend since the start of 2025.

Fibre2Fashion News Desk (SG)

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