German Business Confidence Strongest Since Early 2023

(RTTNews) - German business confidence rose to its highest level in more than three years in September as the economy continued its recovery, monthly survey data from the ifo Institute showed Thursday.

The business climate index rose to 89.9 in September from 88.8 in the previous month. This was the highest score since May 2023 and was also above forecast of 89.1.

Companies assessed their current business situation more positively and their expectations brightened again. "The German economy continues its recovery," ifo Institute President Clemens Fuest said.

The current situation index climbed to 89.5 in September from 88.5 in the previous month. At 90.4, the expectations index rose to the highest level since October 2025, from 89.0 in August.

In manufacturing, sentiment improved again in September due to significantly improved expectations. However, companies assessed the current situation as somewhat worse.

The business climate in the service sector turned positive. Companies were particularly more satisfied with their current business and also revised their expectations upwards.

In trade, business confidence increased in September. Firms assessed their current situation more positively. Their expectations also improved. However, retailers remained very cautious amid rising inflation.

In construction, business confidence remained largely unchanged. While companies were somewhat more satisfied with their current business, their expectations were slightly lower.

Despite the long list of potential downside risks, the German economy is enjoying unexpected resilience and even a small cyclical rebound, ING economist Carsten Brzeski said.

However, the economist added that a cyclical rebound does not automatically make for a structural recovery and does not offset the urgent need for structural change.