German investors are feeling a little more cheerful than they were this time last month, according to the Centre for European Economic Research (ZEW) indicator of economic sentiment, which climbed for the second month in a row.
The barometer, widely watched by financial markets, came in at a reading of 11.2, up from 4.3 in March, where the higher the score the more confident people are feeling. That is still significantly below its long-term average of 24.5, and well off the 50-plus peaks reached in the first few months of last year.
Continued uncertainty about the situation in China – to which Germany’s economy is relatively exposed – along with fears over the future of Britain’s place in the European Union were holding the index back from a more impressive recovery.
“Surprisingly positive economic news from China seems to have improved the sentiment amongst financial market experts. On balance, however, the continued poor growth in China and other important emerging markets continues to be a burden for the German export industry. Furthermore, concern about Great Britain’s possible exit from the EU seems to be having a negative impact,” said Professor Sascha Steffen, head of research at ZEW.
“April’s rise in German ZEW investor sentiment confirms that fears about the global economy have eased, but perceptions of current conditions in Germany have weakened,” said Jennifer McKeown, senior European economist at Capital Economics, who added that the figures point to a slowdown in economic growth in the first quarter of the year.