| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -48.0 | -46.5 | -45.1 |
| Economic Sentiment | 20.0 | 13.0 | 28.1 |
Highlights
ZEW's March survey was mixed with a modest, but smaller than anticipated, worsening in current conditions coinciding with a surprisingly sharp deterioration in expectations
Economic sentiment (expectations) fell fully 15.1 points to 13.0, its first decline since last September and its steepest drop since last March. It was also a 3-month low. At the same time, the current conditions gauge dipped 1.4 points to minus 46.5, its first setback in five months but only a 2-month low.
The March results inevitably reflect worries about the potential fallout from the turmoil in global banking and analysts have marked down their assessment of future earnings for the sector significantly. However, the results could have been weaker. Today's update nudges both the German ECDI (minus 3) and the ECDI-P (minus 4) back below zero but not to the extent that would indicate any significant shortfall in overall economic activity versus market expectations.
Economic sentiment (expectations) fell fully 15.1 points to 13.0, its first decline since last September and its steepest drop since last March. It was also a 3-month low. At the same time, the current conditions gauge dipped 1.4 points to minus 46.5, its first setback in five months but only a 2-month low.
The March results inevitably reflect worries about the potential fallout from the turmoil in global banking and analysts have marked down their assessment of future earnings for the sector significantly. However, the results could have been weaker. Today's update nudges both the German ECDI (minus 3) and the ECDI-P (minus 4) back below zero but not to the extent that would indicate any significant shortfall in overall economic activity versus market expectations.
Market Consensus Before Announcement
Current conditions are expected to fall in March to minus 48.0 versus minus 45.1 in February. Expectations (economic sentiment) are expected to fall 8.1 points to 20.0
Definition
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.
Description
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 around mid-month for the current 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.
