Financial News: German Business Confidence At 13-Month Low

German Business Confidence At 13-Month Low

(RTTNews) - German business confidence declined to a 13-month low in March as the war in the Middle East weighed on expectations, survey data from the ifo Institute revealed Wednesday.

The business climate index fell to 86.4 in March from 88.4 in February. Although the reading was slightly above the forecast of 86.2, this was the lowest since February 2025.

While the assessment of the current situation remained stable, uncertainty among companies increased noticeably.

"The war in Iran has put any hope of a recovery on ice for the time being," ifo President Clemens Fuest said.

The current situation index posted 86.7, unchanged from February. Meanwhile, the expectations indicator declined to 86.0 from 90.2 in the prior month.

"For now, the war in the Middle East should only delay, not derail, Germany's rebound but the risks have clearly shifted to the downside once again," ING economist Carsten Brzeski said.

In manufacturing, business confidence deteriorated in March, following increases in recent months. Expectations declined significantly, and companies assessed their current situation less favorably. Energy-intensive industries were most affected.

Business confidence in the service sector also worsened notably in March. The current situation was assessed as being slightly better but expectations slumped massively. In the trade sector, business confidence worsened due to a significantly more pessimistic outlook and fears of rising inflation dampened expectations.

Business sentiment in the construction sector also declined significantly with expectations falling more sharply than at any time since March 2022. However, current situation was assessed more favourably.

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