By Tuba Ongun
Sentiment among German businesses remained cautious in February as the Ifo Business Climate Index held steady at 85.2 points, according to data released Monday by the Munich-based research institute.
The figure fell short of the market forecast of 85.9 points.
While companies expressed slightly less satisfaction with their current business situation, their expectations for the future showed mild improvement, said Clemens Fuest, head of the Ifo Institute for Economic Research.
Europe's largest economy is in a wait-and-see mode, he added, speaking just a day after Germany’s snap general elections, with a new government yet to be formed.
The Ifo Business Expectations Index rose to 85.4 this month, up from January's 84.3, signaling a cautiously optimistic outlook.
However, the Current Business Situation Index slipped to 85 from 86, indicating some dissatisfaction with prevailing conditions.
The manufacturing sector showed a glimmer of hope, with the business climate improving as order books stabilized. Although the assessment of current conditions slightly worsened, manufacturers were noticeably less pessimistic about the months ahead, with the index rising to -22.1 from -24.8.
In contrast, the service sector saw a decline in sentiment, with its index falling to -4.3 from -2.2. Skepticism grew particularly among transport and logistics firms, reflecting industry-specific challenges.
Trade saw an improvement in mood, with the index climbing to -26.2 from -29.5. Both wholesale and retail traders expressed greater optimism about future prospects and rated their current situation more positively.
The construction sector also saw a slight improvement, with the index rising to -27.6 from -28.1. While expectations became less skeptical, businesses continued to struggle with a lack of orders, leading to a worse assessment of current conditions.