Few would have expected this just a few months ago: the mood in the executive floors of German business improved at the beginning of the cold season.

The business climate index of the Munich Ifo Institute rose in November by 1.8 points to 86.3 points, as the institute announced on Thursday.

The barometer is considered an important leading indicator for the German economy.

The Dax reacted with a prompt price jump of 0.8 percent to 14,540 points.

Svea Junge

Editor in Business.

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The fact that the approximately 9,000 companies surveyed were in a better mood was mainly due to the fact that they are less pessimistic about the coming months.

The expectations indicator rose to 80 points after 75.9 points in October.

However, the companies were somewhat less satisfied with their current business.

"The recession is likely to be less deep than many had expected," said Ifo President Clemens Fuest.

The easing of pessimism about the next six months spread across all sectors.

Confidence is burgeoning again, especially in industrial companies.

The uncertainty about further business development has decreased somewhat, but remained at a high level, said Fuest.

In the energy-intensive industries, however, it increased again.

While service providers and industry assessed their current situation somewhat worse, trade and construction were also more satisfied with their current business.



The significant increase in the Ifo business climate shows that companies are “recognizing an improvement in the economic environment,” commented Jörg Krämer, chief economist at Commerzbank.

"The risk of gas rationing has fallen significantly in recent weeks, and the federal government has massively increased its relief package," he said.

Ulrich Kater, chief economist at Dekabank, also attributes the increase in the barometer to the decreasing uncertainty about the energy supply in the coming months: "The recession is losing its terror." Jens-Oliver Niklasch from LBBW nevertheless warned that it was too early for relief is: "Let's not kid ourselves: these are the indicator values ​​of a recession," he said.

Other mood barometers are also rising

In addition to the Ifo index, other mood indices also recorded an increase in November.

The purchasing managers' index published by the financial services provider S&P Global increased by 1.3 points to 46.4 points.

This slowed down the downturn in the economy.

However, the sentiment barometer, which is based on a survey of 800 companies, remained below the 50-point mark, which signals growth.

The results did not change the assessment "that Germany is probably headed for a recession," said S&P economist Phil Smith.

The Bundesbank also expects a recession in the winter half-year in its monthly report, which was also published on Wednesday.

"However, the extent of this is extremely uncertain," it said.

In the third quarter between July and September, German gross domestic product (GDP) surprisingly grew by 0.3 percent compared to the previous quarter.

The central bank announced that the order backlog in industry was high and supply bottlenecks had eased somewhat.

Nevertheless, the global economic slowdown is expected to dampen exports.

In addition, the Bundesbank economists assume that the positive impulses from the lifting of the corona restrictions will “reduce noticeably”.

The reluctance of consumers is being reinforced by high inflation.

In October, the German inflation rate rose to 11.6 percent according to European calculations - and the Bundesbank warns: "The inflation rate could remain in double digits beyond the turn of the year."