German Economic Sentiment Falters

Germany's economic fortunes have begun to crumble, as so many experts had feared. There was very modest hope that the European Union's largest nation by gross domestic product might somehow sail through the region's recession because of internal consumer demand and strong demand for its goods and services from outside the region. It now appears that the vacuum of Europe's trouble has pulled Germany in.

The new ZEW measure of Economic Sentiment for Germany fell by 4.2 points in November 2012 to a level of minus 15.7 points. According to the ZEW report:

Similar to the previous months, the indicator's negative balance shows that the surveyed experts rather expect the economy to deteriorate than to improve over the next six months. This month's decline supports this view. The negative assessment in November may be due to disappointing leading indicators. In the manufacturing sector, for instance, weak incoming orders indicate a further drop in production.

Douglas A. McIntyre

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