Munich-based Ifo's business climate index, based on a poll of 7,000 companies in Europe's biggest economy, fell to 95.3, the third decline in four months, from 95.6 in July.
Economists had been expecting a bigger drop because of a recent surge in oil prices and doubts about the strength of the global recovery. But the survey showed manufacturers were more upbeat about the outlook for exports than they were in July.
The mid-range forecast of 33 economists polled by Reuters last Friday had predicted a fall to 95.1, with projections ranging from 94.0 to 96.0. The index remains slightly above its long-term average of 95.0, economists said.
Despite the rise in manufacturers' export expectations, Ifo President Hans-Werner Sinn said the survey results indicated the economic recovery was "still not on solid ground".
"The business climate in three areas - manufacturing, wholesaling and retailing - worsened. Only in construction was there a slight improvement," he said.
"Buoyant exports had no impact on domestic demand, as the worsened business situation in retailing shows," he added.
However, Economy Minister Wolfgang Clement insisted the dip in the Ifo index was no "stop signal" for Germany's recovery.
"The economic outlook remains positive," Clement told Reuters, adding he expected and hoped business confidence would rise again if oil prices continued to fall.
Germany's DAX stock index of 30 top firms has lost almost two percent since the start of August, more than the one percent decline on the FTSE Eurotop index of leading European shares.
German exporters such as steel engineer ThyssenKrupp have benefited from surging demand from the United States and Asia, but retailers such as KarstadtQuelle AG have struggled to cope with stagnant consumer spending.
In the IFO survey, an index gauging companies' assessment of their current conditions rose more than expected to 94.7 from 94.1, while a measure of their expectations declined more than expected to 96.0 from 97.1.
London-based Lehman Brothers economist Phyllis Papadavid said the improvement in the current conditions index was the "bright spot" of the survey.
"With domestic demand having remained stagnant in the second quarter, hints of weaker growth in Asia and the United States are likely to result in third-quarter GDP softening to a slower rate of growth."
Federal Statistics Office figures published on Tuesday confirmed GDP growth of 0.5 percent in the second quarter relied almost entirely on exports as private and public spending stagnated and capital investment declined.
US oil prices have surged by some 35 percent to more than $40 a barrel since the beginning of the year, but fell back on Wednesday after a report revealed ample US gasoline stocks.
Analysts estimate that an oil-price rise of $10 sustained over a period of 12 months could shave as much as four tenths of a percentage point from Germany's annual growth rate.