German business sentiment improves as October ifo index reaches 90.2
Manufacturing and construction confidence strengthened, while service companies were less satisfied with their current performance.
Business confidence in Germany improved in October, with the ifo Business Climate Index reaching 90.2 points compared with September’s 89.9 points. The monthly indicator is published by the Munich-based Institute for Economic Research.
The overall improvement came even as firms’ assessment of their present business conditions became slightly less favourable. Carsten Brzeski, head of global macro at ING, noted that October marked the index’s sixth successive monthly rise.
Manufacturers’ views of both current activity and future prospects turned positive, a combination not seen for more than three years. An increase in incoming orders led firms to plan higher production. Construction companies also took a more favourable view of present conditions, alongside a modest improvement in expectations.
Service-sector sentiment declined despite a brighter outlook, as firms were less satisfied with current performance. IT service providers performed particularly well. Confidence in trade held steady: slightly stronger expectations offset a weaker assessment of present conditions, while wholesalers did better than retailers.
Brzeski cautioned that risks included the Middle East war, possible escalation following the US mid-term elections, persistently high oil prices and an expected rise in gas prices during the heating season.
