The SAFE Manager Sentiment Index fell slightly in October, from –0.32 points to –0.40 points , showing that executives of listed companies in Germany remain cautious. The index’s two components did not show a lot of movement either: Financial reports continued to reflect a negative tone, with sentiment virtually unchanged at –1.42 points compared to –1.39 points in September. Earnings conference call sentiment remains positive but weakened modestly, falling from +0.90 to +0.80 points.
In September, the German Parliament first concluded the annual budget for 2025 before the federal government submitted the budget draft for 2026 with the final Bundestag vote expected on 27 November. The budgets and the mid-term financial planning detail how the economic stimulus package aimed at improving infrastructure will be used. With greater certainty about these aspects, companies that expect to benefit from the program are more optimistic about the future. As one manager explains, “The investment program of the German government will provide us with ample business opportunities. It translates into a tailwind for our financial development going forward […].” Another manager argues: “[…] the EUR500 billion German infrastructure fund is a big opportunity for [our company]. […] Germany has to digitize and money is going into this direction. And we have multiple opportunities, which we consider in this regard.”
While managers have more clarity about the future fiscal policy in Germany, geopolitical issues still create considerable unpredictability. Thus, they continue to use words that reflect uncertainty in their financial communication. However, terms like “negative impact” and “difficult to assess” have become less common. “The level of uncertainty about the future direction of the economy remains high,” says Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE. “Companies are carefully weighing the potential positive effects of the federal government’s stimulus package, but most remain cautious about the overall global economic environment.”
Balancing optimism and headwinds
While the stimulus package provides a positive signal for some sectors, executives continue to describe the business environment as demanding. For example, one company noted, “We acknowledge we are navigating in very challenging times, but with well-filled project pipelines in all our existing segments, also the new segments… we are able to be well equipped to navigate this challenging time.” Another manager commented, “At the same time, we acknowledge that the market environment is still challenging. Order intake and order backlog decreased significantly below the previous year's levels due to the challenging market environment. We see volatile political and economic conditions, tariff dynamics and a persistently subdued investment climate in the automotive sector.”
Alexander Hillert, Professor for Finance and Data Science at SAFE, explains: “The data show that there are large differences in how well firms are coping with the current situation. While some see a significant decline in demand, others still manage to attract lots of new orders. However, what all firms have in common is that they are confronted with persistently higher uncertainty. We see that companies are adapting and are shifting from ad-hoc crisis management to a more forward-looking perspective.”
The SAFE Manager Sentiment Index
The SAFE Manager Sentiment Index measures the optimism or pessimism expressed by executives of listed companies in Germany monthly. Developed by Alexander Hillert and his team at the Leibniz Institute for Financial Research SAFE, the Index is based on automated text analysis that evaluates positive and negative statements in financial reports and earnings calls. The Index is based on a three-month rolling window of data.
Since May 2025, the team has systematically measured uncertainty expressed in financial communication, using the Loughran and McDonald Dictionary of Uncertainty Words. This analysis captures uncertainty based on narratives – how often corporate leaders express ambiguity, risk, or doubt. It enables pinning down what top managers are uncertain about.
The future scheduled release dates for 2025 are:
- Tuesday, 11 November
- Tuesday, 9 December
