FRANKFURT – Concerns over financial firms and information technology have muted investor confidence in Europe’s largest economy.
Germany’s ZEW thinktank said Tuesday that its February expectations indicator for the coming half-year slipped to 58.3 points to fall short of the forecast of 65.2 and last month’s reading of 59.6, the best showing since July 2021.
This seemed to reflect the mood of investors in German blue chips: The Dax 40 index was down around 0.4% over the last five trading days and the past month in Frankfurt's morning session on Tuesday.
The ZEW said its current conditions indicator for Germany improved to -65.9 points, which was in-line with the estimate and better than the -72.7 mark set last month.
The thinktank’s measure for the Eurozone’s outlook eased to 39.4 points from 40.8 in January.
“The German economy has entered a phase of recovery, albeit a fragile one.” ZEW President Professor Achim Wambach said. “There are still considerable structural challenges, especially for industry and private investment.”
An eye on exports
(Source: ZEW)
Hopes for improved sales of German goods in other countries spurred optimism among ZEW respondents last month following the conclusion of an EU trade deal with Mercosur countries Brazil, Argentina, Paraguay, and Uruguay, and Brussels. This was followed weeks later by a free trade agreement with India.
Confidence levels for Germany’s export-oriented industries showed moderate to strong improvement this month, the ZEW said, singling out chemicals and pharmaceuticals, steel and metal production, and mechanical engineering. However, it pointed out that the banking, insurance, and IT sectors showed negative development.
“The ZEW economic sentiment index for the Eurozone ticked down in February but remains comfortably higher than in late 2025,” wrote Alexander Valentin from Oxford Economics. “Notably, survey participants reported better current conditions, and we see today's reading as another evidence for resilience in sentiment. This supports the outlook for another quarter of moderate Eurozone GDP growth in Q1 this year.”
Frankfurt-based pollster Sentix said last week that its headline index for Germany improved to -6.9 points in February, the best mark since August of last year. “Institutional investors in particular are revising their stance significantly, resulting in a sharp rise in economic expectations,” the report said.
- View of present improves
- German recovery “fragile”
By Eric Culp, European Editor
LiveSquawk News
@eculp.bsky.social
@EricCulpLS
FRANKFURT – Concerns over financial firms and information technology have muted investor confidence in Europe’s largest economy.
Germany’s ZEW thinktank said Tuesday that its February expectations indicator for the coming half-year slipped to 58.3 points to fall short of the forecast of 65.2 and last month’s reading of 59.6, the best showing since July 2021.
This seemed to reflect the mood of investors in German blue chips: The Dax 40 index was down around 0.4% over the last five trading days and the past month in Frankfurt's morning session on Tuesday.
The ZEW said its current conditions indicator for Germany improved to -65.9 points, which was in-line with the estimate and better than the -72.7 mark set last month.
The thinktank’s measure for the Eurozone’s outlook eased to 39.4 points from 40.8 in January.
“The German economy has entered a phase of recovery, albeit a fragile one.” ZEW President Professor Achim Wambach said. “There are still considerable structural challenges, especially for industry and private investment.”
Hopes for improved sales of German goods in other countries spurred optimism among ZEW respondents last month following the conclusion of an EU trade deal with Mercosur countries Brazil, Argentina, Paraguay, and Uruguay, and Brussels. This was followed weeks later by a free trade agreement with India.
Confidence levels for Germany’s export-oriented industries showed moderate to strong improvement this month, the ZEW said, singling out chemicals and pharmaceuticals, steel and metal production, and mechanical engineering. However, it pointed out that the banking, insurance, and IT sectors showed negative development.
“The ZEW economic sentiment index for the Eurozone ticked down in February but remains comfortably higher than in late 2025,” wrote Alexander Valentin from Oxford Economics. “Notably, survey participants reported better current conditions, and we see today's reading as another evidence for resilience in sentiment. This supports the outlook for another quarter of moderate Eurozone GDP growth in Q1 this year.”
Frankfurt-based pollster Sentix said last week that its headline index for Germany improved to -6.9 points in February, the best mark since August of last year. “Institutional investors in particular are revising their stance significantly, resulting in a sharp rise in economic expectations,” the report said.
Conversely. German business confidence moved sideways last month amid more US trade threats.
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