Global| Oct 13 2009German Financial Experts A Little Less Optimistic
Summary
The German financial community lowered slightly its expectations for the economic outlook. The ZEW indicator of economic expectations declined slightly in October to 56.0% from 57.7% in September. This is still well above the long [...]
The German financial
community lowered slightly its expectations for
the economic outlook. The ZEW indicator of economic
expectations declined slightly in October to 56.0% from 57.7% in
September. This is still well above the long term average of
26.7%. Their assessment of current conditions was, however,
slightly less pessimistic in October, -72.2%, than it was in September
-74.0%. The decline in optimism was the second decline this
year. In July, the excess of optimists in regard to the
outlook declined to 39.5% from 44.5% in June, a more substantial
decline than the present one. The indicators of current
conditions and expectations are shown in the first chart. There survey
was conducted between September 28 and October 12. 288
institutional investors and analysts
participated.
A number
of factors could
account for the caution about the outlook expressed by the participants
in the survey. The economic news from Germany in recent weeks
has been mixed. Industrial Production and New Orders
continued to be positive, but exports declined in August and retail
trade has shown little strength as seen in the second chart. (Exports
have been expressed as an index for comparability.)
The Press has highlighted the decline in expectations, but ZEW's President, Wolfgang Franz, down played the decline. According to him, "The assessment of the financial market experts reflects the prevalent view. The economy will improve only gradually."
| ZEW INDICATORS (Percent Balance) | Oct 09 | Sep 09 | Aug 09 | Jul 09 | Jun 09 | May 09 | APR 09 | Mar 09 |
|---|---|---|---|---|---|---|---|---|
| Current Conditions | -72.2 | -74.0 | -77.2 | -89.3 | -89.7 | -92.8 | 91.6 | -89.4 |
| Expectations | 56.0 | 57.7 | 56.1 | 39.5 | 44.8 | 31.1 | 13.0 | -3.5 |
| Exports (2005=100) | -- | -- | 102.9 | 104.5 | 102.8 | 96.6 | 96.2 | 101.1 |
| Retail Trade (2005=100) | -- | -- | 98.2 | 100.0 | 99.3 | 100.1 | 101.2 | 99.7 |
| Manufacturing New Orders (2005=100) | -- | -- | 91.3 | 89.7 | 87.9 | 84.4 | 81.3 | 91.9 |
| Industrial Production (2005=100) | -- | -- | 64.3 | 92.7 | 93.7 | 92.8 | 88.7 | 91.3 |
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