ZEW Indicator of Economic Sentiment: Optimism Continues Despite Terror Attacks

The ZEW Indicator of Economic Sentiment derived from the ZEW Financial Market Survey again increased in September. It is now standing at +13.7 points which represents an increase of 2.3 points compared to August 2001.

Due to the attacks on New York and Washington a separate look at the results prior and after September 11th is necessary. 131 analysts responded until last Tuesday, and the balance between positive and negative expectations for this group is +20.8. Since September 12th, 168 participants have responded and the result obtained for this period is +8.0. This represents a decline compared to the August result (+11.4).

This indicates that while optimism has been dampened by last weeks' events, the expectations for the German economy remain positive. The share of optimists still outweighs the share of pessimists even after September 11th. Thus, the upward trend in expectations continues, however, there seems to be more uncertainty among the analysts.

In September 299 analysts and institutional investors participated in the ZEW Financial Markets Survey which is conducted monthly by the Centre for European Economic Research (ZEW), Mannheim. The participants were asked about their medium-term expectations concerning economic activity and capital markets. The ZEW Indicator of Economic Sentiment is the balance between positive and negative expectations of the future economic development in Germany within a timeframe of six months.

Contact

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