Germany's business leaders are feeling a little better about what is ahead.
The third straight monthly improvement is a hopeful sign for Europe's largest economy. But it did not come out of nowhere.
Ifo president Clemens Fuest put it plainly. "The situation in Iran is volatile - we don't know where it is going. "But expectations for the coming months are improving and this is coming from manufacturing among other sectors"."
In other words, businesses are looking past the near-term noise and betting on a better second half of the year. The German government also rolled out reforms this month aimed at boosting growth, which may have helped shift the mood.
The higher index does not mean Germany is suddenly booming. Far from it. When the second-quarter economic output is reported on Thursday, analysts expect growth of just 0.1%. That is barely a pulse.
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Fuest described the pattern as a slow recovery that got interrupted by the Iran conflict. "We did expect a recovery at the beginning of the year - it is not a very dynamic recovery but a slow recovery and that was interrupted by the Iran war," he said. Now the hope is that nothing unexpected derails things again. "If nothing unexpected happens, the second half of the year may be one of growth and recovery, but it is going very slow."
The risk is that the Gulf region stays hot. Germany's economy is built on exports, and instability there can disrupt supply chains and raise costs. Oil prices have already jumped, which squeezes margins for manufacturers and raises costs for consumers.
The German Economy Ministry also sees signs that the economy could strengthen later this year. But recovery and growth are two different speeds. For now, the country is crawling forward.
Meanwhile, Germany's biggest car company is sending a different signal. Volkswagen warned that annual revenue could drop by as much as 3% this year. That may sound small, but the company is also floating what would be a massive cut: up to 50,000 jobs worldwide.
The problem is China. Volkswagen has been losing market share there, and that is not a short-term issue. The company's warning is a reminder that not every German business is sharing in that modest improvement in outlook. Some are still dealing with deep structural challenges.
The bottom line: Germany's economy is sending mixed messages. The broad business mood is lifting, but a big employer is preparing for worse. That tension matters for anyone who has money in European stocks or funds that track German companies.
For investors, the big picture is a slow grind, not a crisis. If the Ifo index is right and growth picks up in the second half, that could support export-heavy sectors. But the Volkswagen news shows that individual companies can struggle even when the overall economy improves.
Keep an eye on Thursday's GDP number. It will tell you whether that 0.1% growth estimate holds, and it will be the next real test of whether the slow recovery is on track. The Iran situation remains a wild card, as does energy pricing.
No one is popping champagne here. But after months of bad news, three straight months of improving expectations is worth paying attention to. It is not a boom.
It is a flicker. And sometimes that is how a recovery starts.
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