German investor optimism dips as euro labour costs slow down

GERMAN investors this month registered the poorest economic sentiment since the end of 2012, according to the country’s influential ZEW survey.

The index dropped to 29.8 from 33.1, the sixth month of decline. However, a figure above zero suggests optimism in general about the economic situation, and the score is still marginally above the long-term average for the index.

“June’s fall in ZEW economic expectations suggests that investors have been unimpressed by recent European Central Bank action and adds to signs that the German recovery is nearing a peak,” said Jennifer McKeown of Capital Economics.

Eurozone statistics yesterday also showed that hourly labour costs increased by just 0.6 per cent in the year to the first quarter. The growth was slower than was recorded all through last year, when cost increases ranged from 1.1 per cent to 1.7 per cent.

The slower expansion in labour costs has coincided with declining inflation in the bloc – the region’s consumer price index slumped to just 0.5 per cent in May.