German Business Confidence Rises, Households Want to Save
Ossiano Research · Market Read
German business confidence is at a three-year high. German households want to save.
German business confidence rose to its highest level since May 2023. In the same week, German households' willingness to save rose to a level last seen in the 2008 financial crisis. US consumer sentiment fell, and Canadian retail sales fell in July. This matters for trade because consumer spending ultimately pays for many of the goods being ordered now.
89.9
business climate, Germany
September. Highest since May 2023.
21.5
German willingness to save
Up 6.0 points. A level last seen in the 2008 financial crisis.
-15.0
German income expectations
Down 16.7 points in one month.
48.1
US consumer sentiment
September. Down from 51.7 in August.
Terms like this have a quick explainer. Tap or hover on them.
01 · Why this matters
Why consumer data matters for trade
Goods financed today are sold, in the end, to consumers or businesses. When those buyers spend less, suppliers can see fewer orders and slower payments in the months that follow.
Between September 20 and 25, six releases covered Germany, the United States and Canada. They show three things. German businesses are more confident. Consumer data in all three markets point to caution. And the German Economic Institute (IW) says part of this year's German export growth was due to . In our reading, that means customers building safety stock.
Energy prices remain high. US inflation expectations are well above where they were before the Iran conflict began. Most German households expect high energy prices to reduce their purchasing power. We start with Germany.
02 · Germany: business
German business confidence is at its highest in more than three years
The rose to 89.9 in September, from 88.8 in August. It was the fifth rise in a row after a low of 84.5 in April. We checked the full series back to 2005: the last time the index was higher was May 2023, at 90.9.
Firms rated both their current business and their outlook more highly. ifo said the rise in manufacturing came from expectations, and that manufacturers "remain dissatisfied with their order backlog." Manufacturers expect better months ahead, but their current orders are still weak.
The Joint Economic Forecast, prepared by leading German economic institutes for the federal economics ministry, raised its 2026 growth forecast from 0.6% in the spring to 1.3%.
Figure 1 · Interactive
ifo Business Climate, Germany, since 2005
Choose a time range and which measures to show. Hover over or tap the chart for monthly values. The dashed line marks September's reading of 89.9.
Source: ifo Institute, ifo Business Survey, September 2026, time series file "ifo Business Climate and its Components". Index, 2015 = 100, seasonally adjusted. "Highest since" figures are calculated by our Research Desk from the full ifo series.
03 · Germany: households
German households expect lower income and want to save more
One day after the ifo release, the fell 3.8 points to -30.6, from a revised -26.8.
Two components drove the fall. Income expectations dropped 16.7 points to -15.0, the lowest since April 2026, shortly before Germany's fuel rebate took effect. And willingness to save rose 6.0 points to 21.5. According to NIM, you have to go back to the 2008 financial crisis to find a similar reading.
"The majority of households expect high energy prices to reduce their purchasing power. As a result, they are more skeptical about their income prospects for the next twelve months."*
Original: "Die Mehrheit der Haushalte rechnet damit, dass die hohen Energiepreise ihre Kaufkraft verringern werden. Folglich sind sie skeptischer, was die künftigen Einkommensaussichten für die nächsten zwölf Monate betrifft."
Rolf Bürkl, Head of Consumer Climate, NIM, September 25, 2026
NIM also found that willingness to save rose more sharply among households with good financial resources. NIM's explanation is that these households want to make up for savings lost to inflation. These are households with more money to spend.
Households are slightly more positive about the wider economy. Economic expectations rose 0.5 points to -3.4, the fifth rise in a row. They expect the economy to improve, but not their own income.
German retail sales in July fell 3.4% from June in , according to provisional figures from Destatis. Non-food sales fell 4.8%. Separately, fuel station sales fell 9.1% in real terms after the fuel rebate that applied in May and June ended.
Figure 2
What German consumers said in August and September
NIM indicators, in points. A higher saving reading means more households think now is a good time to save, which weighs on spending. Tap a bar for the value.
Source: NIM Consumer Climate powered by GfK, releases of August 27 and September 25, 2026. About 2,000 interviews per month, conducted on behalf of the European Commission. September survey period: September 3 to 14.
04 · The split
Manufacturing confidence is near neutral. Retail confidence is well below it.
The ifo survey reports results by sector. A year ago, manufacturing's was -13.4. In September it was -2.8, the highest since May 2023. Retail moved the other way, from -23.7 to -26.9.
ifo said: "in light of rising inflation, retailers remain very cautious." Retail's reading has now been below -20 for 16 months in a row.
Figure 3 · Interactive
ifo business climate by sector, Germany
Balances combine firms' views of their current business and their outlook, each measured as the share of positive answers minus the share of negative ones. Zero is neutral. Choose sectors and a range. The table shows the change over the last 12 months.
Source: ifo Institute, ifo Business Survey, September 2026, time series file, "Sectors" sheet. Balances, seasonally adjusted. Twelve-month changes calculated by our Research Desk.
05 · Where the export growth came from
IW: part of the export growth was due to inventory effects
IW published its autumn forecast on September 20. It forecasts German growth of just under 1.2% this year and explains where the export gains came from.
"Especially in the second quarter, real goods exports were 5 percent above the prior year because of inventory effects."*
Original: "Vor allem im zweiten Quartal lagen die realen Warenexporte aufgrund der Lagereffekte um 5 Prozent über dem Vorjahr."
"The gains in industry and exports in the first half of 2026 are confined to a few areas (such as the chemical and electrical industries), which are evidently favored by supply-security motives."*
Original: "Die Zuwächse in der Industrie und beim Export im ersten Halbjahr 2026 beschränken sich auf wenige Bereiche (wie etwa Chemie- und Elektroindustrie), die offensichtlich von Versorgungssicherheitsmotiven begünstigt werden."
"These effects may be temporary if the corresponding needs are met or if these industries' own further production is constrained by supply chain problems."*
Original: "Diese Effekte können vorübergehend sein, wenn entsprechende Bedarfe gedeckt sind oder diese Branchen selbst in ihrer weiteren Produktion durch Lieferkettenprobleme eingeschränkt werden."
IW-Kurzbericht 64/2026, IW Macroeconomics and Business Cycle research group, September 20, 2026
IW says the gains were favored by supply-security motives. In our reading, this means customers bought extra goods to secure their supply. This is consistent with ifo's survey, where the rise in manufacturing came from expectations, particularly in the electrical equipment industry. If IW is right, some of those orders were : goods held in a warehouse as a buffer, not goods already sold to a consumer.
Once buyers have enough safety stock, they order less, regardless of consumer demand. IW names this as a reason the gains may be temporary.
06 · North America
US sentiment fell. Canadian retail sales fell in July.
In the US, the University of Michigan's final September reading showed consumer sentiment at 48.1, down from 51.7 in August and 55.1 a year earlier. The expectations part of the index fell 10.1% in a month.
US households also expect prices to keep rising. Year-ahead inflation expectations jumped to 4.6% from 4.0%. The survey notes that this is well above the 3.4% recorded in February, before the Iran conflict began. Survey director Joanne Hsu said buying conditions for durable goods improved a bit, "in part due to a perception that completing such purchases now would help consumers avoid higher prices in the future."
So there are two reasons to buy early. IW's findings suggest customers of German exporters bought ahead for supply security. In the University of Michigan survey, more US households said now is a good time to buy durable goods, partly to avoid higher prices later. Both can raise demand now and leave less for later.
In Canada, retail sales fell 0.7% in July to C$73.7 billion, according to Statistics Canada. In terms the fall was 1.1%, so Canadians bought fewer goods. Sales fell in eight of nine subsectors. Statistics Canada's points to a 1.3% rise in August, which will be revised.
Figure 4 · Interactive
Latest readings: Germany, US, Canada
Choose a market to see its latest readings.
07 · Ossiano view
Some goods are being ordered ahead of consumer demand
German business confidence is up. IW links part of this year's export and industry gains to inventory effects and supply-security motives. In our reading, that means customers building safety stock. Consumer data in all three markets point to caution, and German households' willingness to save is at a level last seen in 2008. Our view: some of today's goods orders are ahead of consumer demand.
Goods ordered as safety stock, or bought early to avoid higher prices, still ship and still need financing. They may take longer to sell. When goods take longer to sell, buyers ask for longer payment terms and suppliers ask to be paid sooner. Trade finance covers the gap between the two.
Figure 5
How weaker consumer demand reaches suppliers
Five steps from safety-stock orders to supplier payment terms.
- 1
Inventory effects lift exports
IW: real goods exports in the second quarter were 5% above the prior year because of inventory effects. First-half gains were confined to a few areas, such as chemicals and electrical goods.
- 2
Manufacturing confidence rises
ifo: the manufacturing balance reached -2.8 in September, the highest since May 2023.
- 3
Consumers turn cautious
NIM, University of Michigan, Statistics Canada: German willingness to save reached 21.5. US consumer sentiment fell to 48.1, and Canadian retail sales fell in July.
- 4
Goods take longer to sell
Stock ordered ahead of demand sits longer between shipment and sale.
- 5
Payment terms get longer
Buyers ask for more time to pay. Suppliers look for earlier payment on their invoices.
Steps 1 to 3 are drawn from IW, ifo, NIM, University of Michigan and Statistics Canada releases, September 20 to 25, 2026. Steps 4 and 5 are the Ossiano Research Desk's reading.
Figure 6 · Try it
The cost of holding goods longer before sale
Set the value of the goods, how many extra days they wait before being sold, and an annual financing rate.
Value of goods
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Extra days
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Extra financing cost
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Our Research Desk used simple interest: value × annual rate × extra days ÷ 360. The rates shown are for illustration and are not Ossiano pricing.
This calculator explains the concept only. Actual financing costs vary with fees, margins, the base rate used and the terms of each facility.
OBSERVATION 01
Watch manufacturers' order backlog
The ifo index is up, but manufacturers say they are dissatisfied with their order backlog. If safety-stock orders slow, as IW says they may, the backlog is likely to show it first.
OBSERVATION 02
Retail is the weakest sector
German retail has been below -20 on ifo's balance for 16 months, and US consumer sentiment is at 48.1. Suppliers selling to retailers should plan for slower sales into the holiday season.
OBSERVATION 03
Expect requests for longer payment terms
When goods take longer to sell, buyers ask for more time to pay and suppliers ask to be paid sooner. Trade finance pays the supplier now and gives the buyer more time.
Summary
While German businesses are confident, consumers are cautious
German business confidence is at its highest since May 2023, and forecasters have raised their growth outlook. German households, facing high energy prices, expect weaker incomes, and their willingness to save is at a level last seen in 2008. US consumer sentiment fell in September, and Canadian retail sales fell in July.
According to IW, part of this year's German export growth was due to inventory effects and favored by supply-security motives, and these effects may be temporary. Our view for trade: some goods are shipping ahead of consumer demand, the time between shipment and payment is likely to get longer, and demand for trade finance is likely to rise.
The next dates to watch are the NIM Consumer Climate on October 28, the ifo Business Climate on October 26 and the University of Michigan preliminary October reading on October 9.
For questions on how these shifts affect existing or planned trade finance exposures, contact the Ossiano Research Desk.
* Translated from German by the Ossiano Research Desk with the help of AI. The original German text is shown with each quote, and the source documents are linked below so anyone can check the wording.
Sources
- ifo Institute, ifo Business Climate Rises (September 2026), September 24, 2026, and time series file ifo Business Climate and its Components (September 2026). Index and sector readings, manufacturing order backlog and retail comments, and the data behind Figures 1 and 3.
- NIM, Nuremberg Institute for Market Decisions, Konsumklima mit deutlichem Dämpfer (English version), September 25, 2026. Consumer Climate and its components, the Rolf Bürkl quote, and the finding on better-off households.
- NIM, Konsumklima hellt sich auf, August 27, 2026. August readings in Figure 2.
- IW, German Economic Institute (Michael Grömling, Macroeconomics and Business Cycle research group), IW-Konjunkturprognose Herbst 2026: Erholung mit vielen Fragezeichen (IW-Kurzbericht 64/2026, PDF), September 20, 2026. Growth forecast and the inventory quotes in section 05.
- Projektgruppe Gemeinschaftsdiagnose, Gemeinschaftsdiagnose Herbst 2026, September 24, 2026. 2026 growth forecast of 1.3%, raised from 0.6%.
- Destatis, Federal Statistical Office of Germany, Einzelhandelsumsatz im Juli 2026 real um 3,4 % niedriger als im Vormonat, September 1, 2026. Provisional July retail sales, non-food and fuel station figures, and the fuel rebate dates.
- University of Michigan, Surveys of Consumers, Final Results for September 2026, September 25, 2026. Sentiment, expectations, inflation expectations and the Joanne Hsu quote.
- Statistics Canada, The Daily: Retail trade, July 2026, September 24, 2026. July retail sales, volume and subsector figures, and the August advance estimate.
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