German business confidence rises to highest level since early 2023

German business confidence continued to improve despite rising energy prices, pointing to further economic recovery, with the ifo business climate index rising by 0.3 points to 90.2 points in October, the Munich-based research institute announced on Monday.

Germany's most important economic indicator has now improved for the sixth consecutive month, reaching its highest level since early 2023.

The index, based on a monthly survey of 9,000 companies, came in better than analysts had expected. On average, they had forecast stagnation at 89.9 points. "The economic recovery is continuing," ifo President Clemens Fuest said.

The indicator was supported by increased expectations among surveyed companies regarding future business conditions. However, assessments of the current business situation were weaker.

Analysed by sector, manufacturing showed a significant rise, with companies assessing both their current situation and their expectations as substantially better, while services suffered a setback. Service sector companies were less satisfied with current performance, while expectations were up, with IT service providers performing particularly well.

There was little change in the trade sector, with wholesale performing better than retail. The construction sector rose both in current business and in expectations.