In April, the SAFE Manager Sentiment Index fell from +0.67 to +0.15 points. The decline is driven by a deterioration in the tone of earnings calls, while sentiment in financial reports remained broadly stable. The share of words expressing uncertainty increased to 1.57 percent, up from 1.50 percent in March, marking the first notable rise since mid-2025.
“The decline in the SAFE Index shows that managers are reacting to renewed geopolitical uncertainty, specifically due to the conflict in the Middle East,” says Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE. “The uncertainty caused by the conflict is making it harder for managers to plan ahead, leading to a more cautious outlook for the rest of 2026, as much will depend on how long the war lasts. ”
Uncertainty rises as outlook becomes harder to assess
Financial reports show robust performance in 2025, while earnings calls sharply pivot to recent events and 2026 expectations. The noticeably cautious tone underscores executives' mounting concerns over the conflict's medium- and long-term economic risks.
Many firms stressed that the long-term economic effects remain difficult to predict, highlighting increased market volatility. Meanwhile, several companies stated that their 2026 guidance remains unchanged, provided the conflict comes to an end soon. One executive commented: “But as long as this war in the Middle East is not going to take forever, hopefully, and that the overall economical situation in the world is stable, we do not expect a big drama for the next few weeks before the end of this quarter [...].” Similarly, an executive from the manufacturing industry highlighted the uncertain environment but confirmed the company’s 2026 guidance: “Of course, the year is still very uncertain with the events that happen now at the end of February in the Middle East. The overall economic situation remains challenging, but we […] are publishing our guidance today for the full year again and confirming that we expect a stable business performance in 2026 on both turnover and on EBITDA.”
“The current data illustrate a clear tension between solid operational performance and rising geopolitical uncertainty,” says Alexander Hillert, who leads the research team behind the SAFE Index. “While firm fundamentals remain strong for now, managers are increasingly confronted with a highly volatile, rapidly changing, and difficult-to-assess environment shaped by the conflict in the Middle East.”
Limited immediate impact on operations but rising cost pressures
So far, companies have reported little direct impact on their operations and supply chains, Europe is less directly affected by supply disruptions than other parts of the world. One manager stated: “[…] As of today, we don't see visible impacts, but of course, the volatility on geopolitics and the uncertainty worldwide are high. […] While this is -- the Iran conflict is leading to energy uncertainty and cost increases, this is not comparable to the Ukraine war. Europe was heavily impacted through the aggression war in the Ukraine because of the gas and oil supply being given, provided by Russia.”
However, firms increasingly cite higher costs, particularly those related to energy and transportation. One executive from the shipping industry explained: “Of course, we now also have to face the renewed crisis in the Middle East that causes significant additional cost for us, especially short-term, where of course, we then need to see how to recover that over the upcoming couple of months.”
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 are:
- Wednesday, 13 May 2026
- Wednesday, 10 June 2026
- Thursday, 9 July 2026
