German recovery monitor
When will the recovery of the German economy finally start?
Dr Ralph Solveen
Commerzbank Economic Research
09/11/2025
To answer this question, we look at indicators for the individual sectors of the German economy and examine them for signs of an impending upswing. The picture is still very mixed. So far, there are only clear signs of an upswing in construction, and there are at least signs of hope in manufacturing. In contrast, there are no indications yet that the economy will improve significantly in the service sector in the near future.
Manufacturing: At least a glimmer of hope
Despite a slight setback in August, the Ifo Business Climate Index for manufacturing is sending out positive signals, although the index remains at a fairly low level. Business expectations in particular have improved in recent months, while the assessment of the current situation remains rather negative.
The Purchasing Managers' Index for manufacturing has also risen since the beginning of the year. It is now only slightly below the 50 mark, which indicates that the sector is at least stagnating rather than shrinking.
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