German business sentiment hits five-month high
By Benjamin Chiou
Date: Monday 27 Jul 2026
(Sharecast News) - Business sentiment across Germany improved to a five-month high in July, according to the IFO Institute on Monday, with companies turning less pessimistic despite ongoing geopolitical uncertainty.
The IFO's business climate index rose 86.6 points in July, up from 85.7 points in June, with forward-looking sentiment picking up significantly.
This was the third straight monthly improvement and the highest reading since February, coming in ahead of the 86 level expected by analysts.
Confidence levels within manufacturing rose significantly, with expectations in particular seeing a big boost as demand picked up and material shortages eased, though assessments of the current situation were somewhat less favourable.
The business climate also improved among services firms, with scepticism about the coming months easing despite the current situation deteriorating slightly.
The gauge measuring trade sentiment also rose, with retailers in particular less pessimistic about their future performance.
Meanwhile, construction sentiment also picked up, with fewer companies reporting a lack of orders.
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