German economic sentiment misses expectations in March - ZEW Survey

The German ZEW headline numbers regarding economic sentiment and current conditions surprised markets to the downside in March. Germany ZEW current situation index registered at 77.3, below expectations for a reading of 78 in March. While the economic sentiment came in at 12.8, missing expectations for a reading of 13.1.

German economic sentiment improved slightly in March by 2.4 points, while the current conditions index ticked up from 76.4 in February. Meanwhile, the index of euro zone economic sentiment improved to 25.6 from February’s 17.1, beating forecasts for a reading of 19.3.

"The fact that the ZEW Indicator of Economic Sentiment only shows a slight upward movement is a reflection of the current uncertainty surrounding future economic development. With regard to the economic situation in Germany, no clear conclusions can be drawn from the most recent economic signals for January 2017," said ZEW President Professor Achim Wambach.

Data for January 2017 showed that conditions for German companies could worsen. Production figures edged lower in several important neighboring countries within the eurozone, which could have a negative impact on German exports. Furthermore, costs for German companies also rose as a result of increasing labour costs and import prices.