| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -35.3 | -34.8 | -32.5 |
| Economic Sentiment | -5.5 | -10.7 | 4.1 |
Highlights
ZEW's May survey found both current conditions and, in particular, expectations, deteriorating in May.
The current conditions measure shed 2.3 points but, at minus 34.8, was slightly stronger than the market consensus. In fact, the relatively small decline still left the gauge at its second strongest level since April last year. However, the fall in economic sentiment (expectations) was more marked. A 14.8 point slide put the index at minus 10.7, its weakest reading since December 2022 and well short of the market consensus. This measure has declined in each of the last three months.
The May findings show that analysts have taken on board recent disappointingly soft data particularly with regard to the manufacturing sector and have become more cautious about economic recovery prospects. To this end, the ECDI (minus 8) and ECDI-P (minus 10) remain sub-zero and warn that the economy as a whole is at least slightly underperforming market expectations.
The current conditions measure shed 2.3 points but, at minus 34.8, was slightly stronger than the market consensus. In fact, the relatively small decline still left the gauge at its second strongest level since April last year. However, the fall in economic sentiment (expectations) was more marked. A 14.8 point slide put the index at minus 10.7, its weakest reading since December 2022 and well short of the market consensus. This measure has declined in each of the last three months.
The May findings show that analysts have taken on board recent disappointingly soft data particularly with regard to the manufacturing sector and have become more cautious about economic recovery prospects. To this end, the ECDI (minus 8) and ECDI-P (minus 10) remain sub-zero and warn that the economy as a whole is at least slightly underperforming market expectations.
Market Consensus Before Announcement
Current conditions are expected to fall in May to minus 35.3 versus April's minus 32.5. Expectations (economic sentiment) are expected to fall to minus 5.5 versus April's sharp drop to plus 4.1.
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.
