Munich:Business sentiment in Germany saw improvement in October, spurred by more optimistic expectations from companies, as reported by the ifo Institute, based in Munich.

According to Anadolu Agency – English, the ifo Business Climate Index increased to 90.2 points in October from 89.9 points in September, based on the institute's monthly survey of around 9,000 businesses. While company expectations rose to 91.6 points from 90.4 points the previous month, the assessment of the current business situation declined slightly, with the subindex dropping to 88.8 points from 89.5 points.

Clemens Fuest, president of the ifo Institute, noted that "the economic recovery is continuing." In the manufacturing sector, the index showed significant growth, reaching a seasonally adjusted balance of 1.2 points from minus 2.7 points in September. Manufacturing companies reported better evaluations of both their current situation and expectations, marking a return to positive indicators for the first time in over three years. The institute highlighted that companies plan to expand production due to an increase in incoming orders.

The service sector, on the other hand, experienced a decline in business climate, falling to minus 1.2 points in October from 0.7 points in September. Although service firms were less satisfied with their current performance, their expectations improved, with IT service providers showing particularly strong performance.

In the trade sector, the indicator remained stable at minus 17.2 points, as slightly improved expectations balanced a more negative view of the current situation. Clemens Fuest pointed out that the wholesale sector outperformed retail.

The construction sector index rose to minus 15.5 points from minus 17.0 points in September. Companies in this sector reported higher satisfaction with their current business situation and a slight improvement in expectations.