Business index begins 12 months with ‘little momentum’ | EUROtoday

Sentiment throughout main German companies held regular at 87.6 factors, based on the January version of the month-to-month Ifo index.

Some analysts had predicted a slight rebound within the Munich-based basis’s survey of round 9,000 enterprise leaders however the total determine was finally unchanged.

“Assessments of the current situation edged up somewhat, while expectations were revised slightly downward,” Ifo Institute President Clemens Fuest stated. “The German economy is starting the new year with little momentum.”

Germany’s financial system has been struggling lately, with solely marginal GDP progress of 0.2% in 2025, based on provisional figures, and equally marginal destructive progress figures within the two earlier years. Chancellor Friedrich Merz flagged bettering the scenario as a key aim for 2026 in his New Year’s speech.

Sharp improve in struggling manufacturing sector, companies slip

Ifo’s Fuest reported that the index elevated “sharply” within the notably hard-hit manufacturing sector.

“Companies assessed current business conditions as more positive. Their expectations were also notably less pessimistic,” he stated. “However, capacity utilization fell from 78.1 to 77.5%, remaining below the long-term average of 83.2%.”

Meanwhile, the institute discovered a deteriorating local weather within the companies sector, each by way of the curent scenario and the perceived outlook. Ifo additionally stated that the “climate also cooled noticeably in tourism.”

The trade- and construction-specific indices additionally rose. Both retail and wholesale commerce rebounded however “remain well below their long-term averages,” based on Fuest.

Germany’s central financial institution estimates that the sluggish tempo of progress will proceed within the first quarter of 2026, with economists forecasting 1% progress for the 12 months as complete.

Edited by: Wesley Dockery