| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -75.0 | -72.3 | -79.2 |
| Economic Sentiment | 45.0 | 47.1 | 42.9 |
Highlights
ZEW's May survey found a further upgrade to analysts' assessment of the German economy. Both the current conditions and expectations gauges gained fresh ground making for a surprisingly strong report versus the market consensus.
Current conditions rose a further 6.9 points to minus 72.3, their third successive increase and a 9-month high. However, with the improvement from a very weak base the measure remains well short of its pre-Covid mark (minus 15.7). Meantime, economic sentiment (expectations) was up 4.2 points at 47.1. This gauge has increased every month since last July and a stronger reading has not been seen since February 2022.
The May results extend the upward trend seen in both measures over much of 2024 to date. Inflation is falling and with the ECB widely seen cutting interest rates next month, confidence is beginning to return. That said, the current state of the economy leaves much to be desired and manufacturing continues to struggle badly. Still, at 21 and 25 respectively, economic activity in general is at least running rather hotter than market forecasts.
Current conditions rose a further 6.9 points to minus 72.3, their third successive increase and a 9-month high. However, with the improvement from a very weak base the measure remains well short of its pre-Covid mark (minus 15.7). Meantime, economic sentiment (expectations) was up 4.2 points at 47.1. This gauge has increased every month since last July and a stronger reading has not been seen since February 2022.
The May results extend the upward trend seen in both measures over much of 2024 to date. Inflation is falling and with the ECB widely seen cutting interest rates next month, confidence is beginning to return. That said, the current state of the economy leaves much to be desired and manufacturing continues to struggle badly. Still, at 21 and 25 respectively, economic activity in general is at least running rather hotter than market forecasts.
Market Consensus Before Announcement
ZEW's expectations component (economic sentiment) is seen rising to 45.0 versus April's 42.9. This component has exceeded expectations for nine months in a row.
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.
