The business climate in the German supplier industry improved slightly in September 2025. The seasonally adjusted ifo business climate index rose from -11.4 points in August to -9.3 points. The cautious recovery of recent months is thus continuing, even if the overall mood remains in negative territory.
Expectations reach neutral territory
Expectations for the next six months are the main reason for the slight improvement. At +0.1 balance points, they are no longer in negative territory for the first time in over three years. The value thus represents a mathematical balance of optimistic and pessimistic assessments - an indication that the long-lasting downward spiral has been halted for the time being. However, there is still no sign of an economic turnaround.
Current situation remains weak
The assessment of the current business situation deteriorated slightly in September: the index fell from -17.9 to -18.2 points. Around twelve percent of companies rate their situation as "good" and just under thirty percent as "poor". Almost sixty percent speak of a "satisfactory" situation. Overall, the economic basis therefore remains weak and no significant recovery can be expected in the short term.
Automotive industry supports expectations - but no relief in sight
Expectations are being given some tailwind by a positive adjustment to the production forecast by the German Association of the Automotive Industry (VDA). The VDA now expects domestic passenger car production to grow by two percent in 2025 instead of falling by one percent. This correction reflects the fact that the year to date has been better than feared. However, this has hardly had any effect on the current situation of suppliers. On the contrary, the September figures show a slight downturn.
Additional pressure from international overcapacity
At the same time, companies are facing increasing competitive pressure. Due to new US tariffs, suppliers from non-EU countries are increasingly looking for sales markets in Europe. These additional capacities are intensifying competition in already weak markets and further burdening the economic situation of domestic suppliers.
The business climate index for the supplier industry is compiled by the German Supplier Industry Working Group (ArGeZ) in cooperation with the ifo Institute, Munich.