BRUSSELS (dpa-AFX) - German business sentiment improved for the sixth straight month in October, underpinned by more optimistic expectations, monthly survey data from the ifo Institute showed Monday.
The business sentiment index rose to 90.2 in October from 89.9 in the previous month, marking the highest score since May 2023 and surpassing the forecast of 90.0.
The improvement was due to more optimistic expectation, ifo said. However, companies assessed their current situation as slightly worse.
'The economic recovery is continuing,' ifo Institute President Clemens Fuest said.
The current situation indicator declined unexpectedly to 88.8 compared to 89.5 in September. The score was seen at 89.9. Meanwhile, the expectations index posted 91.6, up from 90.4 in the prior month and economists' forecast of 90.0.
ING economist Carsten Brzeski said the ifo survey strengthens the narrative of German economic resilience.
The economist noted that the fall in current assessment indicates that surging energy prices and interest rates started to leave their mark. At the same time, the expectations component was perhaps inspired by last week's investment fair in Berlin, Brzeski added.
Manufacturing showed significant improvement, with business confidence rising notably in October. Companies assessed both their current situation and expectations as substantially better, with both indicators returning to positive territory for the first time in more than three years.
Service providers experienced a setback. Companies reported lower satisfaction with their current business performance, though expectations turned more positive.
Business confidence in trade remained unchanged. While trade companies viewed their current situation more negatively, their expectations improved slightly.
In construction, sentiment improved as companies were noticeably more satisfied with their current business. Expectations also improved slightly.
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