Germany: Ifo confirms improved PMI signal in July

Research evidence excerpt

Germany: Ifo confirms improved PMI signal in July

J P M O R G A N Europe Economic Research

27 July 2026

Germany: Ifo confirms improved

PMI signal in July

Germany’s July Ifo adds to the run of better-than-expected activity signals after last Economic and Policy Research

week’s upbeat flash PMI. The Business Climate Index rose 0.9pt to 86.6, above Mariana Monteiro

consensus but short of our +1.4pt forecast. Expectations drove the move, jumping (44 20) 3493-5147

2.4pts to 86.7, while the current conditions component edged down 0.5pt to 86.5. mariana.reispaivamonteiro@jpmorgan.com

J.P. Morgan Securities plc

For high-frequency tracking, we still put more weight on the PMI, which currently

points to roughly 1%ar growth in 3Q, broadly stable from our 1%ar tracking for the

second quarter (with the hard data due later this week). Looking ahead, the recent

re-escalation in geopolitical tensions is a clear risk to momentum. For now, we see

it as capping the upside to our cyclical recovery view rather than overturning it; we

continue to expect a more durable de-escalation and a firmer growth pick-up in the

coming months.

What stands out in the July Ifo is the improvement in sentiment despite a less

supportive backdrop: firms reported some deterioration in current conditions,

energy prices have moved higher and geopolitical and trade tensions have re-

intensified. Even so, the pick-up was led by industry and closely-linked segments

such as wholesale trade. This may reflect growing confidence that the

government’s reform push, alongside ongoing fiscal support, is beginning to

translate into firmer, more sustainable demand and a more supportive business

environment. That said, it is still too early to conclude that this marks a durable

shift.