FRANKFURT –– Business confidence in Europe’s largest economy fell to its worst mark since early last year over concerns the Iran war will hurt economic growth.
Germany’s Ifo economics institute said Wednesday that its latest survey of domestic companies produced a decline in March’s headline business climate index to 86.4 points, a tenth higher than the market estimate but the lowest result since February 2025. The latest performance followed last month’s 88.6 reading, the highest since August.
Ifo reported that its March expectations component for the coming six months ended a four-month uptrend by dropping to 86.0 points versus the market forecast of 86.6 and 90.5 in February.
The current conditions measure of the index held at the 86.7 points reported last month, which was the best showing since July 2024.
“The war in Iran has put any hope of a recovery on ice for the time being,” Ifo said.
The institute noted that its business climate indices declined for all sectors, covered by the survey: manufacturing, services, construction, and trade.
Companies are clearly concerned about the impact of the war on their businesses, and on their costs. “The true extent of the economic damage caused by the rise in energy prices ultimately depends crucially on further developments in the Middle East,” noted Thomas Gitzel, chief economist at VP Bank. “If the war ends quickly and goods continue to flow freely through the Strait of Hormuz, the economic fallout will remain manageable.”
(Source: Ifo)
Varying takes
Even with a war on, Germany’s flash manufacturing PMI rose unexpectedly in March, improving to 51.7 points, its highest mark in 45 months. Pollster S&P Global said Tuesday that local production had improved to cover expected shortages due to the war.
Conversely, German investor confidence “collapsed” this month, according to the country’s ZEW economics institute.
Also on the side of more pessimism was the European Central Bank, which last week held its key interest rates at levels set in June. But the latest staff projections pointed to rising inflation and falling growth in the Eurozone, bad news for most German businesses.
EUR/USD slipped below 1.16 following the report.
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postMessage({ action: 'CheckChannelStatusReponse', stream_status: data.stream_status.status, onair: data.stream_status.onair, connected: data.stream_status.connected });
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session_info.session_email = data.session_email;
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session_info.application_name = data.application_name;
session_info.http_referrer = data.http_referrer;
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function start_log() {
var session_start_date = new Date();
session_start_time = session_start_date.getTime();
var months = ['Jan','Feb','Mar','Apr','May','Jun','Jul','Aug','Sep','Oct','Nov','Dec'];
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session_info.effective_latency = data.effective_latency;
session_info.mean_opinion_score = data.mean_opinion_score;
session_info.restarts = data.restarts;
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data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
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data_array.restarts = session_info.restarts;
data_array.threshold = 0;
data_array.curr_delay = session_info.curr_delay;
data_array.session_length = session_info.session_length;
data_array.date = current_time;
data_array.webrtc_protocol = session_info.protocol;
data_array.ping_time = session_info.ping_time;
data_array.jitter = session_info.jitter;
data_array.packet_loss = session_info.packet_loss;
data_array.effective_latency = session_info.effective_latency;
data_array.mean_opinion_score = session_info.mean_opinion_score;
data_array.stream = session_info.stream;
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socket_emits++;
if (socket_emits == 100) { socket_emits = 0; }
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- Headline measure beats estimates
- View of present unchanged
- Outlook sours
By Eric Culp, European Editor
LiveSquawk News
@eculp.bsky.social
@EricCulpLS
25 March 2026 | 09:50 GMT
FRANKFURT –– Business confidence in Europe’s largest economy fell to its worst mark since early last year over concerns the Iran war will hurt economic growth.
Germany’s Ifo economics institute said Wednesday that its latest survey of domestic companies produced a decline in March’s headline business climate index to 86.4 points, a tenth higher than the market estimate but the lowest result since February 2025. The latest performance followed last month’s 88.6 reading, the highest since August.
Ifo reported that its March expectations component for the coming six months ended a four-month uptrend by dropping to 86.0 points versus the market forecast of 86.6 and 90.5 in February.
The current conditions measure of the index held at the 86.7 points reported last month, which was the best showing since July 2024.
“The war in Iran has put any hope of a recovery on ice for the time being,” Ifo said.
The institute noted that its business climate indices declined for all sectors, covered by the survey: manufacturing, services, construction, and trade.
Companies are clearly concerned about the impact of the war on their businesses, and on their costs. “The true extent of the economic damage caused by the rise in energy prices ultimately depends crucially on further developments in the Middle East,” noted Thomas Gitzel, chief economist at VP Bank. “If the war ends quickly and goods continue to flow freely through the Strait of Hormuz, the economic fallout will remain manageable.”
Varying takes
Even with a war on, Germany’s flash manufacturing PMI rose unexpectedly in March, improving to 51.7 points, its highest mark in 45 months. Pollster S&P Global said Tuesday that local production had improved to cover expected shortages due to the war.
Conversely, German investor confidence “collapsed” this month, according to the country’s ZEW economics institute.
Also on the side of more pessimism was the European Central Bank, which last week held its key interest rates at levels set in June. But the latest staff projections pointed to rising inflation and falling growth in the Eurozone, bad news for most German businesses.
EUR/USD slipped below 1.16 following the report.
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