Germany's Auto Sector Business Climate Worsens in March

(MENAFN) Germany's automotive business climate worsened in March, sliding to minus 18.7 points from minus 15.7 points in February, as manufacturers reported a sharper deterioration in day-to-day operating conditions, the Munich-based ifo Institute revealed Tuesday.

Despite the headline decline, the data carried notable undertones of resilience. While German auto firms painted a bleaker picture of their immediate circumstances compared to the prior month, their forward-looking expectations improved — a paradox that industry analysts say reflects the sector's complex recovery trajectory.

Anita Wolfl, industry expert at ifo, noted that although manufacturers described their current business environment as considerably worse than in February, they simultaneously revised their near-term outlook upward.

One closely watched indicator offered further encouragement: the sector's order backlog continued its gradual recovery, climbing to minus 13.5 points in March — still in negative territory, but extending an unbroken upward trend that began in September 2025.

Export expectations added another layer of cautious optimism, rising for the fourth straight month to reach 30.7 points, according to the ifo data.

Perhaps the most striking development came on the employment front. The auto sector has been battered by sweeping job cuts since 2022, but March figures suggest the worst may be easing. Employment expectations surged from minus 44 points in February to minus 19.8 points in March — a sharp and closely watched turnaround.

Wolfl noted the stabilization was already filtering through into official government figures, pointing to a renewed uptick in job listings for automotive positions in the first quarter of the year as early corroborating evidence.

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