• Germany's news in English

Investor confidence droops for fifth consecutive month

The Local · 14 Sep 2010, 15:33

Published: 14 Sep 2010 15:33 GMT+02:00

Facebook Twitter Google+ reddit

Despite strong current economic growth, the ZEW sentiment indicator, based on a survey of analysts and institutional investors, plunged 18.3 points to minus 4.3 points, its fifth monthly drop in a row.

It was also the lowest level since sentiment registered minus 5.8 points in February 2009, and far below a historical average of 27.2 points, ZEW said in a statement.

By falling into negative territory, the index also showed that for the first time since March 2009, more investors expect economic conditions to deteriorate than to improve in the next six months.

But those polled also assessed current conditions much more favourably, with a corresponding index jumping to 59.9 points in September from 44.3 points the previous month.

That was the 16th increase running and the highest level since December 2007, ING senior economist Carsten Brzeski noted.

ZEW president Wolfgang Franz was quoted as saying: "In their expectations, financial experts put more weight on risks than they did before.

"These are for example the slowdown of the US growth and the yet unresolved problems in the eurozone which are for instance reflected by the large interest rate spreads for Greek government bonds."

Across the 16-nation eurozone, data from the Eurostat statistics agency showed industrial production was flat in July, and weaker in June than initially estimated.

Output was also stagnant in the wider 27-nation European Union, which includes Britain and eastern industrial power Poland.

In Germany, Finance Minister Wolfgang Schäuble told lawmakers Tuesday that although "we will not have the same growth next year as this year," he still expected "continued and sustainable economic development."

Economists forecast 2010 growth of 3.0 percent for Germany but expect the pace to slow markedly next year.

The latest data on German industrial output showed it edging higher by just 0.1 percent in July while a drop in orders suggested weaker activity ahead.

"This may not only indicate a temporary slowdown but could well be the first sign of a flattening of economic activity" from record quarterly growth of 2.2 percent in the second quarter of the year, ZEW said.

Story continues below…

But while Germany's economy was clearly slowing down, it will also probably continue to grow, economists forecast.

An order backlog and strengthening domestic demand should support business activity, and low interest rates and rising utilisation of industrial capacity should stimulate investment in machinery and equipment, several noted.

A clearer picture should emerge with the release of the Ifo business index next week, they added.

Brzeski stressed meanwhile that the pattern of improving current conditions and deteriorating expectations was last seen in mid-2006, and was followed by "a period of solid growth until the start of the financial crisis" in mid-2007.


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

16:32 September 14, 2010 by catjones
What happened with last month's: Germany is the Envy of the Economic World?
10:40 September 16, 2010 by dbert4
The economic reality and investor reality are vastly different. The second has only to do with them being able to play the markets to make money.
Today's headlines
Man dies after beating for peeing near Freiburg church
The Johannes Church in Freiburg. Photo Jörgens Mi/Wikipedia

A middle-aged man from southern Germany has died after being attacked by a group of men who took umbrage with the fact he was urinating in the vicinity of a church.

The Local List
Seven German celebrities with uncanny doppelgängers
Former Berlin mayor Klaus Wowereit and actor Alec Baldwin. Photo: DPA; Gage Skidmore, Wikimedia Commons

Check out these seven look-a-likes of well known German figures - we admit that some are more tenuous than others...

Israel seeks to buy three new German submarines: report
A Dolphin class submarine. Photo: DPA

Israel is seeking to buy three more advanced submarines from Germany at a combined price of €1.2 billion, an Israeli newspaper reported Friday.

Here’s where people live the longest in Germany
Photo: DPA

Germans down south seem to know the secret to a long life.

More Germans identify as LGBT than in rest of Europe
Photo: DPA

The percentage of the German population which identifies as lesbian, gay, bisexual or transgender is higher than anywhere else in Europe, according to a new study.

'Reichsbürger' pair attack police in Saxony-Anhalt
File photo: DPA.

A "Reichsbürger" and his wife attacked police officers on Thursday, just a day after another Reichsbürger fatally shot an officer in Bavaria.

Five things not to miss at the Frankfurt Book Fair
Photo: DPA

From consulting a book doctor to immersing yourself in an author's world with the help of virtual reality, here are five things not to miss at this week's Frankfurt Book Fair, the world's largest publishing event.

Parents who don't get nursery spot for kid entitled to pay
Photo: DPA

The Federal Court of Justice (BGH) ruled on Thursday that parents whose children don't receive placements in nursery care are entitled to compensation.

Eurowings braces as cabin crew union proclaims strike
Photo: DPA

A union representing cabin crew for Lufthansa's budget airline Eurowings announced that strikes could take place at any time over the next two weeks, starting on Monday.

Mysterious German U-boat wreckage found off Scotland
Photo: ScottishPower

First World War U-boat "attacked by sea monster” thought to be found off Scottish coast.

Sponsored Article
How to vote absentee from abroad in the US elections
10 things you never knew about socialist East Germany
Sponsored Article
Last chance to vote absentee in the US elections
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
Sponsored Article
How to vote absentee from abroad in the US elections
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
The best ways to get a visa as an American in Germany
jobs available
Toytown Germany
Germany's English-speaking crowd