The German Ifo institute announced that the business climate index increased sharply from minus 26.4 points in August to minus 21.8 points, reaching the highest level since August 2022.
Companies assess both their current situation and expectations for the coming months as significantly improved, the institute states.
“Residential construction can breathe a little easier,” said Klaus Wohlrabe, head of research at Ifo, in the statement.
Wohlrabe further mentioned, “Although it is still early to talk about a true turnaround, the lowest point appears to be behind us.”
Despite positive signs, the situation of orders remains tense, as the proportion of companies facing a lack of orders slightly increased from 45.7% to 46.7% in September.
The number of cancellations also remains high, although it slightly declined from 8.5% in August to 8.4% in September.
“The increase in construction permits has not yet been reflected in order books,” Wohlrabe says.
