The ifo Business Climate Index for Germany rose 1.4 pts to 86.7 in March, the highest since July 2024, reflecting improved sentiment among German companies as a result of the expectation of looser fiscal policy.

• The Current Situation index improved 0.7 pts, and the Expectations index jumped 2.1 pts to 87.7.

• Manufacturing (+5.3 pts to -16.6) saw a significant improvement to a 8-month high, with less pessimistic expectations despite slightly declining order books.
• The service sector (+3.2 pts to -1.1) business climate improved, led by rising optimism among architectural and engineering firms.
• In trade (+2.5 pts to -23.7), sentiment rose as firms assessed both their current business and future expectations more positively.
• Construction (+2.8 pts to -24.6) saw slight improvements in current assessments, though expectations remain skeptical due to ongoing order shortages.

• Ifo’s heatmap remains mostly in crisis mode.