German economic sentiment has fallen for the first time since August after a series of indicators showed declining German industrial output and exports, according to the Centre for European Economic Research (ZEW).
The ZEW indicator of economic expectations for the next month declined to negative 15.7 in November from negative 11.5 in October, ZEW says in a press release. The drop follows increases in both October and September that helped the index recover from its August level of 25.5 points.
‘Prevailing recessionary developments in the eurozone affect the German economy via foreign trade and a lack of confidence,’ explains ZEW president Wolfgang Franz in the release. ‘This is likely to be a burden for economic growth in Germany during the next six months. Since mid-2012, the economic expectations of the financial market experts have moved more or less sideways while remaining in negative territory.’
ZEW says the drop in November could be attributed to ‘disappointing leading indicators. In the manufacturing sector, for instance, weak incoming orders indicate a further drop in production.’
The assessment of the current economic condition in Germany fell by 4.6 points to 5.4 points, which indicates that the assessment, while having dropped, is still slightly positive. Germany is the only country covered by the ZEW survey that was assessed with a positive number.
The indicator numbers represent the difference between the percentage of analysts who have positive outlooks and those with negative outlooks. This survey includes 263 analysts who were interviewed between October 29 and November 12.
The ZEW report also shows economic expectations for the next six months in the eurozone as a whole dropping 1.2 points to negative 2.6 points. The assessment of the current economic situation in the zone, meanwhile, has fallen 0.9 points to negative 80.3.
The US is the only country with a positive six-month outlook in the survey, rising 6.9 points to 13.1. France’s outlook also rose, by 2.2 points, but remains in negative territory at negative 15.4 points. The outlook for the UK dropped by 1.6 points to negative 8.5 and Italy’s outlook fell 2.3 to negative 10 points.
The outlook of most major stock indices, however, has brightened, with only France’s CAC 40 and Italy’s MIBTel falling. Expectations for the Dow Jones Industrial Average increased 10.7 to 34.9 points while the outlook for Germany’s DAX has risen 2.9 points to 26.4.
Among individual economic sectors, the outlook for the services industry increased most, rising by 4.2 to 16.7 points. The outlook for the automobile sector posted the biggest decline, falling by 8.9 to negative 67 points.
