The SAFE Manager Sentiment Index fell from -0.19 to -0.32 in September, showing that executives of listed companies in Germany are more pessimistic than in the previous months. The SAFE Index analyzes the current annual and quarterly reports and earnings conference calls. The sentiment in financial reports dropped markedly from -1.05 to -1.39, the weakest reading since February 2021. Companies’ latest financial reports reflect the full impact of US tariffs on second-quarter results. In contrast to the more negative tone in financial reports, the sentiment in earnings conference calls improved further, rising from +0.76 to +0.90 points. Thus, the full picture remains mixed.
Managers still use a lot of words reflecting uncertainty in their financial communication, but expressions like “difficult to predict” or “highly volatile” became less frequent. “The uncertainty may have decreased because the recent trade deals have provided companies with a more predictable framework. At the same time, earnings are weak in the second quarter, particularly in sectors hit by tariffs,” says Florian Heider, Scientific Director of the Leibniz Institute for Financial Research SAFE. The level of words expressing uncertainty in earnings calls has declined slightly for the second consecutive month, from 1.68 to 1.62 percent.
Shifts in language patterns point to challenges and adjustments
Negative terms such as “worst case,” “slowdown [in] demand,” and “unfavorable currency” occur more frequently in the analyzed documents. The wording points to concerns about weaker demand and adverse exchange rate effects, leading managers to prepare for potential worst-case scenarios. An executive explains: “The second quarter continued to be shaped by a persistently challenging market environment. The general market environment was characterized by a high degree of economic uncertainty in light of ongoing geopolitical tensions and partly unresolved global trade disputes.”
Executives linked the weak quarter to global instability. “Our second quarter was characterized by a high degree of economic uncertainty in light of ongoing geopolitical tensions and unresolved global tariff discussions,” reported one company. “This led to a noticeable slowdown in demand and increased pricing pressure across different end markets, which we expect to continue throughout the second half of 2025.” Another manager referred to the changed operating environment: “On the macroeconomic side, the worst-case scenario regarding tariffs has not materialized, yet recent agreements between the US, Japan, the EU and some other countries suggest directionally higher tariffs compared to previous frameworks.”
Positive phrases common earlier in the year, such as “strong growth” or “good start,” have decreased significantly, reflecting the weaker earnings picture in the second quarter. “The strong performance of the first quarter has clearly given way to a weaker picture,” says Alexander Hillert, Professor of Data Science and Finance at SAFE. “Due to the trade agreements, managers can work with clearer rules, yet the tariffs’ negative impact is undisputable.”
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 analyst conferences. 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. In other words, it enables pinning down what top managers are uncertain about.
The future scheduled release dates for 2025 are:
- Wednesday, 8 October
- Tuesday, 11 November
- Tuesday, 9 December
