Germany's Ifo business climate index falls in December

(MENAFN) Business confidence in Germany weakens again in December, with the country’s key sentiment indicator continuing its downward trend after last month’s decline. The latest survey, based on responses from roughly 9,000 firms across multiple sectors, shows that economic optimism remains subdued as the year draws to a close.

The overall business climate gauge for industry and trade drops to 87.6 points in December, down from a revised 88 points in November. This outcome disappoints expectations, which had anticipated a modest improvement.

Forward-looking sentiment also deteriorates, as the expectations component falls from 90.5 to 89.7 points. By contrast, companies’ views of current business conditions remain unchanged, with the corresponding index holding steady at 85.6 points.

According to survey findings, firms are increasingly pessimistic about prospects in the first half of 2026, while assessments of present conditions show no sign of improvement. The general mood suggests the year is ending without any meaningful optimism.

Manufacturing confidence weakens further, with companies reporting fewer new orders and signaling plans to reduce production levels. Activity in the services sector also loses momentum, as sentiment slips back into negative territory. Providers express lower satisfaction with current operations and voice more cautious expectations for the months ahead.

Conditions in the trade sector worsen as well, driven by retailers’ disappointment with Christmas sales performance. Meanwhile, the construction industry shows no improvement, with sentiment remaining stuck at a weak level.

Overall, the latest data point to a broad-based cooling in business confidence across Germany’s economy, reinforcing concerns about a prolonged period of stagnation.

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