ZEW Indicator of Economic Sentiment - Indicator Continues to Rise

The ZEW Indicator of Economic Sentiment for Germany rises by a substantial +13.0 points in August. Standing at +50.0 points compared with +37.0 points in July, it is again clearly above its historical average of +34.3 points.

Economic optimism in Germany may have been fuelled by the development of the world economy, which continued to be sound in spite of high oil prices, but also by first signals of a revival of domestic demand. Hopes for a revival are motivated by an increase in incoming orders, especially from the domestic market. "Perhaps we are currently observing how the export industry finally kick-starts our domestic economy. Is "Germany's surprising economy" (The Economist) getting ready to jump?", comments ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

Thanks to a higher industrial output, the experts are much more confident about the current economic situation in Germany this month. The indicator of the current economic situation increases from -66.7 to -61.1 points.

Economic expectations for the euro zone have improved, too. In August, the euro indicator rose by +12.6 points compared with last month's figure and now stands at +41.6 points. However, the corresponding indicator for the current economic situation in the euro zone has changed very little and now stands at -33.3 points.

322 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. The solid line indicates the historical mean of the indicator.

Contact

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

Dr. Sandra Schmidt, E-mail: s.schmidt@zew.de