(de-news.net) – The Ifo Business Climate Index rose to 88.4 points in October, up from 87.7 points in September, indicating a modest yet noteworthy improvement in overall business sentiment across Germany. This upward movement was primarily driven by more optimistic expectations regarding future economic developments, surpassing initial forecasts. However, assessments of current business conditions declined slightly, suggesting that while outlooks have brightened, present operational realities remain subdued. Nonetheless, the German economy continues to anticipate a gradual recovery over the course of the coming year.

In the manufacturing sector, business expectations improved despite ongoing dissatisfaction with current operations. Capacity utilization increased by one percentage point to 78.2 percent, although it remains significantly below the long-term average of 83.3 percent. The decline in new orders appears to have stabilized, contributing to a cautiously positive outlook. The service sector experienced marked gains, particularly in tourism and information technology, where sentiment improved both in terms of future prospects and current evaluations. Retail trade also registered an uptick in business climate, largely attributable to diminishing pessimism—especially within the wholesale segment—despite a slightly more critical view of present conditions.

Conversely, the construction industry saw a marginal decline in its index value. While the current situation was assessed more favorably, expectations for the near future became increasingly pessimistic. A persistent lack of incoming orders remains a central challenge for the sector, as noted by the Ifo Institute.

The index is based on survey responses from approximately 9,000 senior executives across German enterprises. Their collective input continues to reflect a prevailing sense of cautious optimism regarding the potential for economic revitalization in the months ahead.