Germany’s investor confidence improves in December but still underperforming

LONDON (ICIS)–Investor confidence in Germany rose in December but remained well below its long-term average as Europe’s largest economy continues to underperform, the country’s ZEW economic research institute said on Tuesday.

The ZEW indicator of economic sentiment for Germany rose by 6.6 points from November to stand at minus 17.5 in December.

The long-term average is 22.5 points.

Meanwhile, in the eurozone, confidence was up only slightly, rising by one point month on month to  minus 21.0.

“Although the rise in economic expectations is a welcome one, it should not be over-interpreted,” said ZEW president Achim Wambach.

“The assessment of the economic situation has worsened dramatically for both Germany and the eurozone. This is indicative of relatively weak economic growth in the fourth quarter.”

Wambach added that both Brexit and the looming international trade dispute are uncertainties that are having a particularly negative effect on private investment and Germany’s exports.

Meanwhile, the assessments of the current situation in both Germany and the eurozone fell considerably in December, down 12.9 points and 6.21 points respectively to stand at 45.3 and 12.1.

For the chemicals-pharmaceuticals sector, the respective ZEW sub-index rose 3.5 points to stand at 1.7 in December.

The chemicals-intensive construction sector’s index posted a fall of 3.5 points to 27.1 points.