DE: ZEW Survey

Tue Sep 19 04:00:00 CDT 2017

Consensus Actual Previous
Current Conditions 86.5 87.9 86.7
Bus. Expectations 11.8 17.0 10.0

ZEW's September survey found analysts more upbeat about the German economy with stronger than expected rises in optimism about both the current situation and the outlook.

The current conditions gauge gained a relatively modest 1.2 points to 86.7. This was its sixth increase in the last seven months and made for the best reading since June. At the same time, expectations climbed a sizeable 6.1 points to 17.0. This was their sharpest advance since January 2015 but their first rise in four months. Indeed, the bounce only reversed a fraction of the cumulative 10.6 point decline recorded since May.

Still, the overall tone of the results is impressive enough and should equate with sustained solid economic momentum over the remainder of 2017. Certainly, there is nothing here to suggest that Sunday's looming federal elections are of any concern.

The Mannheim-based Centre for European Economic Research (ZEW), asks German financial experts every month for their opinions on current economic conditions and the economic outlook for Germany (as well as other major industrial economies). The responses are synthesised into two simple indices that provide a snapshot of how the economy is seen to be performing.

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.