Germany’s business sentiment improved in February, with the Ifo Institute Business Climate Index rising from 87.6 to 88.6, slightly above expectations of 88.4. Current Assessment Index climbed notably from 85.6 to 87.6, beating forecasts of 86.1. Expectations Index edged up from 89.6 to 90.5, in line with consensus.
Sector breakdown shows broad-based improvement. Manufacturing sentiment rose from -12.3 to -11.3, while services moved back into positive territory at 0.1 from -2.6. Construction also improved, narrowing losses from -14.3 to -11.5. Trade as the weakest component, slipping further to -21.8 from -21.1.
The institute noted companies were more satisfied with current conditions and increasingly optimistic about the outlook, describing the data as “first signs of recovery.” While levels remain subdued by historical standards, February’s improvement reinforces the view that Germany may be emerging from stagnation, offering cautious support to broader Eurozone growth expectations.
