The key facts

  • The ifo index rose to 90.2 points in October from 89.9 in September — the sixth consecutive month of growth
  • In manufacturing, both the current situation and expectations indicators turned positive for the first time in more than three years
  • ING analyst Carsten Brzeski names the risks: the war in the Middle East, oil and gas prices, and low water levels on transport routes

ifo index rises for the sixth month in a row

Business confidence in Germany continued to rise in October 2026: the ifo business climate index climbed to 90.2 points from 89.9 points in September. The data was published on Monday, 26 October; the index is calculated monthly by the Munich-based Ifo Institute for Economic Research and is regarded as an important leading indicator of Germany's economic dynamics. “The resilience of the German economy persists: the ifo index has been rising for the sixth month in a row,” Carsten Brzeski wrote in an analytical note, head of global macro analysis at ING (quote cited from euronews).

Manufacturing returns to positive territory

The most notable shift occurred in manufacturing: the index there rose markedly, and both the current situation and expectations indicators returned to positive territory for the first time in more than three years. Companies reported an increase in new orders and plan to expand output. This is a key change compared with the previous situation: manufacturing had until recently remained the weak link, and its move into the “plus” zone confirms the ongoing recovery, even though companies are overall somewhat less satisfied with current conditions.

Sectors and lingering risks

The picture across sectors is uneven. In the services sector, business sentiment deteriorated due to lower satisfaction with current results, but expectations improved — with IT service providers showing particularly good dynamics. In retail and wholesale trade, the index was unchanged: companies assess the current situation more pessimistically, but expectations improved slightly, with wholesale looking better than retail. In construction, the index rose on the back of greater satisfaction with current conditions and slightly improved expectations.

Risks and structural problems

Despite the positive dynamics, risks to the recovery remain. Brzeski lists the war in the Middle East and possible further escalation after the US midterm elections, persistently high (or even higher) oil prices, as well as the expected blow from rising gas prices in the current heating season. An additional threat is the low water level on key transport routes, which could disrupt industrial supply chains and production. “The better the economy copes with short-term risks, the higher the probability of unexpectedly strong growth,” he added. Meanwhile, according to euronews, economists warn: long-term growth will depend on solving structural problems — cumbersome bureaucracy, high energy prices and weak competitiveness.