DE: ZEW Survey

Tue Feb 20 04:00:00 CST 2018

Consensus Actual Previous
Current Conditions 94.0 92.3 95.2
Bus. Expectations 16.0 17.8 20.4

ZEW's February survey found analysts still generally upbeat about the German economic situation. Neither the assessment of current conditions nor the gauge of future expectations was as optimistic as in January but the latest levels were still historically robust.

Current conditions weighed in at 92.3, down from 95.2 in January but reversing only half of that month's gain and the second highest reading on record. Expectations were off 2.6 points at 17.8, their second decline since November and possibly dented by uncertainty about the political climate. Even so, they were still 1.4 points above their 2017 average and the gentle trend firming that began in mid-2016 remains intact.

The February ZEW results may warn of some slight downside risk to tomorrow's flash PMI report and Thursday's Ifo Survey but in the main continue to paint a healthy picture of German business activity.

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.