Falling sales, US trade war, Syria weigh on Germany investor confidence

Source: ICIS News


LONDON (ICIS)--Investor confidence in Germany continued to slump in April as a result of falling domestic economic indicators, international trade conflicts for the US and the potential for escalating conflict in Syria, research group ZEW said on Tuesday.

The economic analyst’s sentiment indicator fell to minus-8.2 points for April compared to 5.1 points in March, the lowest level in several years and a more pronounced slump than during the months immediately following the UK’s vote to leave the EU in mid-2016.

The sentiment indicator level has dropped by 26 points in two months, hinting at the extent that various geopolitical conflicts are weighing on western investor confidence.

The long-term average of the indicator in 23.6 points.

While global conflict may be the overriding factor driving down German investor sentiment, a tepid performance for production and sales at home is also casting a shadow over expectations for the rest of the year.

“The significant decline in production, exports and retail sales in Germany in the first quarter of 2018 is also having a negative effect on future economic development,” said ZEW president Achim Wambach.

Investor perceptions of the current eurozone climate improved slightly in April, but expectations for how it will develop fell 11.5 points month on month to 1.9 points, ZEW added.

Pictured: Chemical park in Dormagen, Gemany
Source: Hans Blossey/imageBROKER/REX/Shutterstock