Eurozone, German economic sentiment continues to slip, chems post modest growth

Author: Morgan Condon

2019/10/15

LONDON (ICIS)--Economic sentiment in Germany and the eurozone slipped in October, according to economic research group Zew on Tuesday.

Zew said its indicator of economic sentiment for Germany fell 0.3 points compared with the previous month, to give a reading of minus 22.8 points, which is well below the long-term average of 21.4 points.

Although this was only a slight decrease on the September figure, the October assessment of current economic conditions fell to minus 25.3 points, a drop of 5.4 points from the previous month.

It was the lowest reading since April 2010.

Economic sentiment in the eurozone also declined, with the Zew indicator for the wider 19-country single-currency bloc falling to minus 23.5 points, a drop of 1.1 points on the previous month.

The assessment of the current economic situation in the eurozone was also sharply weaker, with the indicator falling 10.8 points to a new level of minus 26.4 points.

CHEMS UP SLIGHTLY
Despite the regional decreases, sentiment surrounding the eurozone's chemicals and pharmaceuticals sector saw modest growth of 2.2 points, taking the reading to minus 18.4 points.

Other downstream sectors did not perform as well, with the assessment for automobiles falling 7.8 points to minus 73.2 points, and mechanical engineering tumbling 16-and-a-half points to minus 52.0 for the same period.

Although trade tensions between China and the US have eased, this failed to lift economic sentiment, and with the expected Brexit deadline of 31 October looming, expectations could remain bleak for the foreseeable future.

“The slight decrease in both the Zew indicator of economic sentiment and the situation indicator shows that financial market experts continue to expect a further deterioration of the German economy," said the institute's president Achim Wambach.

“The recent settlement in the trade dispute between the US and China does not seem to diminish economic scepticism at this stage.”

Pictured: Chemicals in a German drugstore
Source: Uwe Lein/AP/Shutterstock