| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -76.0 | -79.8 | -79.9 |
| Economic Sentiment | 3.0 | 9.8 | -1.1 |
Highlights
Analysts continued to revise up their near-term expectations for economic growth in November but remained very downbeat about the current state of the German economy. Still, overall the survey results were again on the firm side of the market consensus.
Economic sentiment (expectations) rose a solid 10.9 points to 9.8, comfortably beating the market call and its first positive reading since April. The latest outturn was also an 8-month high, albeit still well below its long-run average. By contrast, current conditions again struggled, edging up just 0.l point to a surprisingly weak minus 79.8. That said, this was the first month since April in which the sub-index has not declined.
The low level of current conditions remains consistent with German GDP sliding into recession this quarter but, if accurate, the improvement in sentiment suggests that any downturn should be quite mild. In any event, today's update puts both the German RPI and RPI-P at 3, close enough to zero to signal that overall economic activity is performing much as forecast.
Economic sentiment (expectations) rose a solid 10.9 points to 9.8, comfortably beating the market call and its first positive reading since April. The latest outturn was also an 8-month high, albeit still well below its long-run average. By contrast, current conditions again struggled, edging up just 0.l point to a surprisingly weak minus 79.8. That said, this was the first month since April in which the sub-index has not declined.
The low level of current conditions remains consistent with German GDP sliding into recession this quarter but, if accurate, the improvement in sentiment suggests that any downturn should be quite mild. In any event, today's update puts both the German RPI and RPI-P at 3, close enough to zero to signal that overall economic activity is performing much as forecast.
Market Consensus Before Announcement
Current conditions are expected to improve to minus 76.0 in November from October's minus 79.9. Expectations (economic sentiment) are expected at plus 3.0 from October's minus 1.1.
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.
