Germany’s Ifo Business Climate Index rose to 88.6 in February 2026 from 87.6 in January, slightly beating market expectations of 88.4. The reading marked the highest level since August 2025, pointing to tentative signs of recovery in Europe’s largest economy. Firms reported greater satisfaction with current conditions, with the relevant subindex climbing to 86.7 from 85.7, while expectations improved to 90.5 from 89.6. Sector-wise, sentiment strengthened in manufacturing (-11.3 vs -12.3), driven by notably better assessments of current conditions. Confidence also rebounded among service providers (0.1 vs -2.6), largely on improved expectations and led by the logistics sector, and in construction (-11.5 vs -14.3). In contrast, morale in trade edged lower (-21.8 vs -21.1), as companies, particularly in retail, viewed their current situation less favorably.
