German business morale rises for sixth month

German business morale rose for a sixth straight month in October, adding to signs of a modest recovery in Europe's largest economy.

The Ifo Institute's business climate index rose to 90.2 points, its highest level since May 2023. The reading was above expectations in an analyst poll by financial platform FactSet.

Ifo head Clemens Fuest said “the economic recovery is continuing.” The institute said German manufacturers were positive about both their current business situation and their outlook for the first time in more than three years.

Germany has recorded only low growth since a burst of post-pandemic demand in late 2022. Its exporters have faced Chinese competition, US tariffs imposed by President Donald Trump and higher energy prices linked to the wars in Ukraine and the Middle East.

The German government earlier this month raised its full-year growth forecast to 1.3%, up from an April forecast of 0.5%. LBBW bank economist Jens-Oliver Niklasch said the business climate was continuing to improve and that rising optimism was encouraging.