ZEW Indicator of Economic Sentiment: Consolidation at a High Level

The ZEW Indicator of Economic Sentiment for Germany fell slightly in October. The indicator now stands at +60.3 points compared with +60.9 points in September. The indicator thus suggests that optimism continues, but uncertainty concerning the economic upswing has not vanished completely.

The indicator is hovering around this level for two reasons. On the one hand, the recent rise in the value of the euro is likely to hurt the sales and profits of the German export industry. Secondly, recent economic figures for Germany and the US were mixed. Positive figures from the US job market are contradicted by signs of weak consumer confidence. This casts some doubt on the underlying dynamics of economic recovery in the US. The figures for the German economy were mixed as well. There was a surprising drop in industrial production while incoming orders increased.

Economic sentiment for the euro zone deteriorated slightly in October. The index fell by -2.8 points compared with last month's figures and now stands at +66.8 points. Nevertheless, economic sentiment for the euro-zone remains more optimistic than for Germany.

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-range 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