German business sentiment improves more than expected in August
By Michele Maatouk
Date: Tuesday 25 Aug 2026
(Sharecast News) - German business sentiment improved more than expected in August, according to a survey released on Tuesday by the Ifo Institute.
The business climate index rose to 88.8 from 86.7 in July, coming in above expectations for a reading of 87.2. This marked the fourth consecutive monthly increase and took the index to a one-year-high.
The current situation index fell to 88.5 in August from 86.5 the month before, while the expectations index printed at 89.1, up from 86.8.
The index for the manufacturing sector improved to -4.2 in August from -9.6 a month earlier, while the service sector gauge rose to -2.1 from -4.4. The index for trade came in at -20.5 in August versus -23.4 in Jule, while the index for construction printed at -16.5, up from -20.5.
Ifo Institute president Clemens Fuest said: "Companies were more satisfied with their current situation, and they revised their expectations significantly upward. Uncertainty continued to decline. Despite another rise in energy prices, the German economy is recovering."
Carsten Brzeski, global head of macro at ING, said: "While it's still too early to call this a self-sustained economic recovery, growth above potential in the first and second quarters of the year, together with four consecutive months of increasing sentiment, are promising. We have clearly seen worse.
"It seems as if German sentiment has become immune or numb to the long list of potential downside risks."
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