Financial News: German Ifo Business Sentiment Rises

German Ifo Business Sentiment Rises

05/22/2026 - 06:48:00 (RTTNews)

(RTTNews) - German business sentiment improved in May after falling for two straight months but the index remained at a low level as energy shock triggered by the near closure of the Strait of Hormuz weigh on manufacturing, survey results from the ifo Institute showed Friday.

The business climate index posted 84.9 in May, up from 84.5 in April. The reading was also above economists' forecast of 84.2.

Companies were somewhat more satisfied with current business and their outlook for the coming months was less pessimistic.

The German economy is stabilizing for the time being but the situation remains fragile, ifo Institute President Clemens Fuest said.

The Ifo index stabilized in May but remained too weak to bring substantial relief, ING economist Carsten Brzeski said. The current situation index rose to 86.1 from 85.4 a month ago, while it was forecast to fall to 85.1. Similarly, the expectations index advanced to 83.8, while the score was expected to remain unchanged at 83.5.

Business confidence in the manufacturing sector improved somewhat due to more positive assessments of the current situation. However, expectations continued to deteriorate and the number of new orders declined.

Business climate in the service sector improved significantly. Expectations recovered notably and companies assessed their current business situation as somewhat better.

Business confidence in the retail sector improved again in May. Companies were more satisfied with their current situation. Moreover, pessimism regarding expectations decreased somewhat.

In the construction industry, business climate declined slightly in May. This was due to a less favourable assessment of the current situation and expectations improved somewhat after the slump in the prior month.

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