Germany's business conditions improve in October

As sentiment among companies in Germany improved slightly, the Ifo Institute for Economic Research said the Business Climate Index rose to 88.4 points in October, up from 87.7 points in September.

"This was due to improved expectations for the coming months. However, the current business situation was assessed as slightly worse. Companies remain hopeful that the economy will pick up in the coming year." the institute said on Monday.

The manufacturing index rose in October, with the expectations in particular brightening in the sector. Capacity utilization rose by one percentage point to 78.2%, but remains well below the long-term average of 83.3%.

"However, companies were less satisfied with current business. The decline in new orders has come to a halt," the Ifo added.

In the service sector, the business climate improved significantly, while the service providers were less skeptical about the coming months. The current situation index for the services sector was revised slightly upward, with the sentiment in tourism and IT services improved in particular.

The business environment also improved in trade. Less negative expectations, especially in wholesale, were the cause of this. The current state of affairs, however, was deemed to be marginally worse.

On the other hand, the index slightly decreased in the construction industry. Expectations were more negative, despite the fact that the existing state of affairs was rated as notably better. One of the industry's primary issues is still a shortage of orders.