German business sentiment deteriorates in March - Ifo

25th Mar 2026 10:09

(Sharecast News) - German business sentiment deteriorated in March, albeit less than expected, dented by the Iran conflict, according to a survey released on Wednesday by the Ifo Institute.

The business climate index fell to 86.4 from 88.4 in February, coming in above expectations for a reading of 86.1.

The current situation index was unchanged at 86.7 and the expectations index declined to 86.0 from 90.2.

The manufacturing index fell to -14.3 in March from -11.5 the month before, while the gauge for the service sector slumped to -5.1 From 0.1.

The trade index printed at -24.6 in March, down from -21.8 in February, and the construction gauge was -15.8, versus -11.6 a month earlier.

Ifo Institute president Clemens Fuest said: "Uncertainty among companies has increased noticeably. The war in Iran has put any hope of a recovery on ice for the time being."

Carsten Brzeski, global head of macro at ING, said: "Germany's long-awaited cyclical upswing took a hit in March, as the war in the Middle East has blasted away optimism. This is at least what the just released Ifo index is telling us.

"Coming from the highest level since last summer, Germany's most prominent leading indicator took a severe hit as the war in the Middle East, soaring energy prices, and new uncertainty dented previous optimism."