German business confidence rebounds in Oct. ’24

German business sentiment showed signs of recovery in October, with the ifo Business Climate Index for Germany rising to 86.5 in October, up from 85.4 in September, marking the first increase after four consecutive declines.

Companies expressed greater satisfaction with current conditions, and expectations improved despite lingering scepticism.

In manufacturing, the downturn paused as pessimism about future prospects eased, although assessments of current business worsened. Capacity utilisation dropped to 76.5 per cent, below the long-term average of 83.4 per cent, with weak order volumes cited as a persistent challenge.

The service sector saw notable improvement, with stronger logistics, tourism, and IT sentiment. Trading businesses also reported slightly better expectations, despite mixed views on current activity.

Meanwhile, the construction industry reported a decline in overall confidence, driven by more pessimistic forecasts, although the evaluation of present conditions improved.

The latest data suggests the German economy may have stabilised after a period of decline.

Attribution: ifo 

Subediting: M. S. Salama