Germany Recovery Monitor – Update

The German economy has grown slightly again in recent quarters.

Dr. Ralph Solveen

Commerzbank Economic Research

09/10/2026

Now, however, it faces challenges such as the war in Iran and the resulting sharp rise in energy prices. We regularly monitor indicators for the individual sectors of the German economy and analyze them for signs that the German economy will continue to grow. Most sentiment indicators have risen recently, largely offsetting the declines that followed the start of the war in Iran. The “hard” numbers, on the other hand, have recently been somewhat weaker again, suggesting that the pace of growth in the third quarter is likely to be slower than in recent periods.

Manufacturing: Improved sentiment, “hard” data remains subdued

The Ifo Business Climate Index for the manufacturing sector improved noticeably once again in August, bringing the index to a level significantly higher than it was before the outbreak of the Iran war. In particular, the assessment of the current business situation was noticeably more positive, and expectations have also brightened somewhat. However, the Business Climate Index remains in negative territory, meaning that negative responses still outnumber positive ones.

The Purchasing Managers' Index for the manufacturing sector rose again by a good two points in August. At 54.3, it now stands well above the 50-point mark, indicating expansion in the sector. This also applies to the sub-indices for new orders and production.

For full text see attached PDF-Version.

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Germany Recovery Monitor – Update (pdf, 145 KB)

Germany Recovery Monitor – Update

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