FALCON POWERS – Germany’s economic sentiment plunged to an 11-month low in September, with the ZEW index dropping sharply. Economic outlook worsened across key German industries, impacting the broader eurozone morale.
Germany’s economic outlook took a dramatic and unexpected downturn in September, signalling a deepening slump in confidence for the eurozone’s largest economy.
The ZEW Economic Sentiment Index, a key measure of the economic morale held by financial experts, dropped from 19.2 points in August to just 3.6 points in September, well below forecasts of 17 points. This marks the index’s lowest level since October 2023.
The sub-index measuring current conditions fell sharply to -84.5 points, down from -77.3 points in August and significantly below expectations of -80 points. It is the weakest reading since May 2020.
Expectations for the next six months have worsened across most industries, with the steepest declines seen in mechanical engineering, steel, automotive, and banking. Conversely, construction, utilities, and telecommunications sectors experienced a more optimistic outlook.
The malaise in Germany’s economy also affected the broader eurozone, where the ZEW sentiment index dropped from 17.9 points to 9.3 points in September, missing the anticipated 16.3 points and also hitting lowest in nearly a year.
