ZEW Financial Market Survey: Sharp Decline in Economic Outlook in October

Following the drop in economic expectations by 40 per cent last month, the indicator has continued its downfall in October declining by 50 per cent. The indicator has thus fallen from 40.8 points in September to currently 20.4 points. This indicates that the German economy is expected to lose momentum.

These are the findings of the latest ZEW Financial Market Survey, a monthly study conducted by the Centre for European Economic Research (ZEW), Mannheim, among about 400 institutional investors.

The sentiment indicator has thus taken a nose dive from the peak level of almost 90 points in January 2000. Now, the indicator roughly equals the level of spring 1998. This pessimistic assessment of the surveyed institutional investors is, above all, due to the high oil price and the current steep losses on global stock markets.

To that effect, financial market experts have revised their evaluations of the various sectors in the latest survey. Especially revenues of the cyclical sectors are evaluated more negatively. The steel, electrical and engineering industries as well as the construction industry have experienced the greatest decline in expectations when compared to the previous month.

Contact

Birgit Sasse, E-mail: sasse@zew.de

Dr Felix Hüfner, E-mail: huefner@zew.de