The business climate in Germany has reported little movement over the course of 2025, according to new data from the ifo Institute.
Between January and November, the ifo Institute‘s business climate index rose by just 2.8 points overall, indicating the stagnation of German’s business environment this year.
‘From January to November, the index only rose by around 2.8 points overall, which is practically tantamount to a standstill,’ it noted.
In addition, assessments of the current business situation declined by 0.4 points, while business expectations over the course of the year rose by 5.9 points.
‘Sober and concerned view’
“Companies are taking a sober and concerned view of economic development,” commented 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.”
In industry, the business climate has shown a notable improvement since the start of the year, however almost all industrial sectors remain in negative territory, and remain ‘predominantly pessimistic’ about the future.
Manufacturers of electrical equipment reported a notable increase in the business climate over the course of the year, of 29.4 points, however sentiment still remained subdued.
In the chemical industry, sentiment fell notably in October and November, leading to an overall fall of 8.6 points for the year. Elsewhere, among manufacturers of food and animal feed, the barometer was down by 12.7 points.
Retail sentiment
Sentiment in the retail trade ‘recovered somewhat’ over the course of the year, the ifo Institute noted, but remained at a very low level as the year drew to a close, making the full year worse overall than recent years.
In construction, sentiment showed an upward trend over the course of year, but still remained in negative territory. Elsewhere, in the service industry, minimal change was recorded (although sentiment in warehousing and storage improved by 13.1 points), the business climate in publishing fell by 14.9 points, while the hospitality industry recorded an improved outlook, up 6.8 points since January.
“Overall, it is evident across all sectors of the economy that it would be wrong to speak of a recovery,” Wohlrabe added. Read more here.
