DE: ZEW Survey

Tue May 15 04:00:00 CDT 2018

Consensus Actual Previous
Current Conditions 85.8 87.4 87.9
Bus. Expectations -9.3 -8.2 -8.2

ZEW's May survey found analysts' views on the German economic situation little different from April.

The current conditions index was just 0.5 points weaker at 87.4. However, this still constituted its fourth consecutive drop and its lowest reading since last October. Expectations, which tumbled dramatically last month, were flat at minus 8.2 and so equalled their least optimistic mark since November 2012. The long-run average is 23.4.

ZEW attributed the relative softness of the May results to a combination of growing concerns about the Eurozone economy and worries about the U.S. decision to back out of the nuclear treaty with Iran. Fears of a further escalation of the international trade conflict with the U.S. as well as the latest rise of crude oil prices were also seen as important factors.

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.