ZEW's July survey was mixed with a slightly more optimistic assessment of the current state of the economy contrasting with a fourth consecutive decline in expectations.
The current conditions gauge was up 1.0 points at 63.9, a 2-month high and its first advance in the last three months. However, expectations dipped a further 1.8 points to 29.7, their lowest mark since November 2014.
The buoyancy of the current conditions measure suggests that recent developments in Greece (and China for that matter) have had only a limited impact on analysts' perceptions of where the German economy stands. That said, the downgrading of expectations is consistent with recent economic data that have suggested a somewhat disappointing second quarter. Nonetheless, ZEW maintain that the overall economic outlook for the country remains positive which may make for some limited upside risk to this month's PMI surveys.
The monthly survey, conducted by the Mannheim-based Center for European Economic Research (ZEW), asks German financial experts for their opinions on current economic conditions and the economic outlook for Germany as well as other major industrial economies.
The ZEW Indicator of Economic Sentiment is calculated from the results of the ZEW Financial Market Survey. The ZEW is followed closely as a precursor and predictor of the Ifo Sentiment Survey and as such is followed closely by market participants. The data are available the second week of the month for the preceding month. The survey provides a measure of analysts' view of current economic conditions as well as a gauge of expectations about the coming six months. The latter measure tends to have the larger market impact and reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic. About 350 financial experts take part in the survey.
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