The latest Ifo Business Climate Index shows that sentiment among German companies weakened in November 2025, slipping to 88.1 points from 88.4 in October. While businesses rated their current situation slightly more positively, expectations for the coming months fell, signaling a persistent lack of confidence in a near-term economic recovery.
Manufacturing companies were particularly pessimistic about their future prospects, reporting lower order books even as current conditions improved. In contrast, the service sector saw modest improvements in current conditions, although transport and logistics faced setbacks, while tourism showed signs of improvement. Trade and retail sentiment declined, dampened by a disappointing start to the Christmas season, and construction showed improving conditions but continued weak demand.
The Ifo report emphasizes the growing uncertainty in predicting the German economy’s trajectory. Tools such as the Business Cycle Clock, Heatmap, and Business Uncertainty Index illustrate that while some sectors hover in recovery, others are slipping into slowdown or crisis, highlighting the uneven nature of growth. For policymakers and investors, these insights offer a clear signal: structural challenges remain, and caution is warranted when planning for the months ahead.
Read the full report and explore the charts on the Ifo Institute website.