ZEW Indicator of Economic Sentiment: Confidence Continues to Rise

The ZEW Indicator of Economic Sentiment for Germany continued to increase considerably in August. The indicator now stands at +52.5 points as compared to +41.9 points in July.

This development further widens the gap between the indicator and the historical mean of 33 points and confirms the expectation of an economic rebound at the beginning of next year. "The financial analysts' optimism remains undiminished; it is probably a leap of faith for the expected economic rebound in the next year" comments ZEW president Prof. Dr. Wolfgang Franz.

The economic sentiment for Germany will probably benefit from the most recent revival in the US-economy. The improvement of consumption and the trade balance was surprisingly strong in the USA. Certainly the increase in new orders in the German manufacturing industry in June and the unexpectedly high earnings of many Daxand MDax corporations have also contributed to the growing optimism.

Economic sentiment in August increased less strongly for the euro-zone than for Germany. The index gained +7.6 points compared with last month and now stands at 58.1 points.

310 analysts and institutional investors participated in this month's ZEW Financial Markets Survey which is conducted on a monthly basis 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 shows the balance between positive and negative expectations regarding future economic activity in Germany within a timeframe of six months.

Contact

Volker Kleff, E-mail: kleff@zew.de

David Lahl, E-mail: lahl@zew.de