“The improvement in business sentiment is more pronounced in assessments of the current situation than in expectations: here, the index has reached its highest level since June 2024. This pointed to a moderate acceleration of economic activity toward the end of the second quarter. All in all, the war in Iran appears to have had only a minor impact. At the same time, companies remain cautious about the rest of the year. This may mean either that there is a certain degree of skepticism regarding the negotiations between the U.S. and Iran and/or that other factors continue to weigh on sentiment. It is worth noting, however, that expectations in the manufacturing sector have recovered significantly. So at least the manufacturing sector seems to expect the situation in the Middle East to continue to stabilise.”

Dr Dirk Schumacher