The economic sentiment indicator slipped marginally to 38.5 points, showing that optimism persists but has plateaued. Meanwhile, the current situation score of minus 78.7 points reveals that the economy remains deeply strained despite a slight uptick. Confidence in the government's ability to address persistent structural challenges is waning, even as new investment programmes aim to boost growth.

Sectoral trends highlight a mixed recovery, as the chemical and metal industries face worsening prospects, while banking and insurance continue to show further decline. Encouragingly, private consumption surged by 13.3 points, signalling a revival in domestic demand supported by stronger performance in IT, telecommunications, and services.

The eurozone follows a similar pattern of cautious optimism, with expectations rising to 25.0 points and current conditions improving modestly to minus 27.3 points. In summary, the latest updates suggest that while consumer activity is injecting short-term momentum, Germany's industrial weaknesses and policy uncertainty continue to weigh on sustained recovery. These updates take the RPI to 5 and the RPI-P to minus 3, meaning that economic activities continue to perform within the expectations of the German economy.

Current conditions expected to recover a bit to minus 78 in November from a dismal minus 80.0 in October. Economic sentiment is seen better at 40.5 in October versus 39.3 in October.

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 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.