DE: ZEW Survey

Tue Nov 14 04:00:00 CST 2017

Consensus Actual Previous
Current Conditions 88.0 88.8 87.0
Bus. Expectations 21.0 18.7 17.6

ZEW's new survey found a slight improvement in analysts' views about the German economic situation this month. The results were mixed compared with the market consensus.

The current conditions measure weighed in at 88.8, up from 87.0 in October and a new post-Great Recession high. Expectations advanced a smaller 1.1 points to 18.7, their third increase in as many months and their best reading since May.

Expectations are still well short the levels seen over much of 2015 but, at some 11.4 points above their mark a year ago, optimism has clearly strengthened. This ought to bode well for the November Ifo and PMI surveys although there is no particular short-term correlation.

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.