Still, German business sentiment could take a hit from an emission scandal that has embroiled car manufacturer Volkswagen this week and is expected to undermine trust in the German manufacturing sector.
Volkswagen is one of Germany's biggest employers, with more than 270,000 workers employed in the country.
Ifo economist Klaus Wohlrabe said the Volkswagen scandal broke too late to be reflected in the Ifo survey and that any negative impact would only likely be reflected in the next sentiment index, Reuters reported.
"The Ifo survey tends to lag a bit behind other surveys such as the ZEW and PMI, both of which softened in September," Jonathan Loynes, chief European economist at Capital Economics, said in a note.
"And, of course, none of the surveys will yet have picked up the impact of the VW scandal," he said. "While the economic effects will not all be negative - indeed, the recall work will presumably boost activity - it would be no surprise to see sentiment in the German industrial sector fall in the next round of surveys."
For now, markets drew support from the upbeat Ifo survey, with Germany's benchmark Dax stock index up 0.75 percent out outperforming markets in London and Paris.