The Center for European Economic Research (ZEW) released its September 2024 survey indicating a stabilization in German economic sentiment. The ZEW Indicator of Economic Expectations for Germany rose to 37.3 points, a 2.6-point increase from the previous month, according to the report published Tuesday from Mannheim.
ZEW President Achim Wambach described the financial market experts as “moderately optimistic” regarding the results, noting a divergence between expectations and the perceived current situation. “Expectations are stabilizing, while the assessment of the current situation has deteriorated” he commented. Significant risks persist, stemming from ongoing uncertainty surrounding US trade policy and the anticipated period of intensive policy reforms in Germany, often referred to as the “Autumn of Reforms.
Reflecting this sentiment, the ZEW’s assessment of the current economic situation in Germany continued to decline. The current conditions indicator fell to -76.4 points, a decrease of 7.8 points compared to the August reading.
Prospects for export-oriented industries showed improvement following a recent downturn. The automotive, chemical and pharmaceutical sectors, alongside metal production, are anticipated to benefit. While this indicates a positive shift, the balance figures for all three sectors remain negative.
The outlook for the Eurozone also demonstrated a slight improvement. The Eurozone economic expectation indicator increased to +26.1 points, a 1.0-point rise from the prior month. In contrast to the German indicator, the assessment of the current Eurozone situation showed a modest increase, currently standing at -28.8 points – 2.4 points above the previous reading.