German analyst and investor confidence down in September
The Zew economic sentiment index has revealed German analyst and investor confidence fell to a 2½ year low in September as the ongoing euro zone debt crisis and fears of a global slowdown dampened sentiment.
The index, which measures expectations of economic activity over the next six months, fell for the seventh consecutive month to -43.3 from August’s reading of -37.6, representing the lowest level since December 2008.
The figure was worse than forecasts of a drop to -44.1 and is way below the historical average of 26.5.
Zew also said its gauge of current conditions fell to 43.6 in September – the lowest since July 2010.
A level above 0.0 indicates optimism, while a level below 0.0 indicates pessimism.
Meanwhile, economic sentiment in the euro zone also fell more than forecast to -44.6 from -40.0 in August. Economists had expected this index to fall to -42.5.
Commenting on the report, Zew President Wolfgang Franz said, “The downward trend of economic perspectives is losing momentum this month. However, the economic outlook is characterised by a high degree of insecurity, which according to the financial market experts undermines investor and consumer sentiment.”
Earlier this month, the Paris-based Organisation for Economic Cooperation and Development (OECD) revised its growth forecasts for Germany, which is the euro zone’s largest economy.
Germany, which has been regarded as Europe’s powerhouse, is expected to contract by 1.4% in the fourth quarter on an annual basis.
Germany has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.
Statistics office Destatis recently revealed German exports fell more than expected in July.
According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.
The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.