German firms have 'little faith' in recovery as business index falls

Sentiment among German companies has deteriorated unexpectedly, the Munich-based ifo Institute said on Monday.

The institute's monthly business climate index fell by 0.3 points to 88.1 points in November. Analysts had expected an increase to 88.5 points.

Germany's economy - Europe's largest - is struggling to bounce back from consecutive years of recession, with economists expecting only marginal growth in 2025.

Businesses "have little faith that a recovery is coming anytime soon," said the institute's president, Clemens Fuest.

The decline in Germany's most important economic barometer was mainly due to a more pessimistic assessment of future business.

Expectations have dampened significantly, particularly in industrial companies, the institute warned.

However, the approximately 9,000 companies surveyed assessed the current situation as slightly better than in the previous month.