September 19, 2017

Economic Outlook – leading indicators at a glance

Germany – leading indicators weaken from a high level

Most leading indicators for the German economy have recently developed somewhat weaker, but remain at a high level. As a result of the less favorable assessment of the situation, the Ifo Business Climate Index (Ifo-Geschäftsklimaindex) declined while the expectations rose slightly again. The sentix Economic index showed a similar trend, although the overall index managed to grow slightly. The Economic Sentiment Indicator also declined, as did the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator). After its decline in the previous month, the Purchasing Managers' Index for the German Industry (Einkaufsmanagerindex) rose again, reaching 59.3 points just below the 2017 high of 59.6 points. According to the toll statistics, truck mileage was slightly increased.

Eurozone – leading indicators continue to excel

The leading indicators for the Eurozone have developed differently, but are on a high level. The Sentix Economic Index (sentix-Konjunkturindex) was able to grow at a minimal pace, as the higher expectations could slightly overcompensate the less positive assessment of the situation. The Economic Sentiment Indicator (ESI) rose somewhat, but the index fell slightly for the EU as a whole. In August, the Purchasing Managers’ Index for the Industry (Einkaufsmanagerindex) compensated for the decline from the previous month and returned exactly to the level of June with 57.4 points. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) continued to decline.

The most recent quarterly Ifo Index for the Eurozone was published in July. Compared to the previous month, the index went up. The balance of the assessment of the situation improved from +21.9 to +33.5 points, the expectation balance rose from +31.0 to +37.1 percentage points. Thus, the overall index went up from +26.4 to +35.2 points.

World Economy – leading indicators send positive signals

The global leading indicators also send positive signals overall. The OECD business climate index (OECD-Geschäftsklima) has risen further and is now slightly above its long-term average. The German Federal Bank’s leading indicator (Bundesbank Frühindikator) for the global economy is moving slightly above its long-term average as well, but at teh same time has been stagnating for several months. After its decline in the previous month, the Purchasing Managers’ Index for the global Industry (Einkaufsmanagerindex) rose again, reaching the highest level in six years at 55.2 points. Both two freight indices the Baltic Dry Index as well as the Container Throughput Index continued to rise.

The most recent quarterly Ifo Index for the world economy was published in July. The overall index decreased by a minimum of 0.3 to +12.7 points. However, this is due to opposing developments in the two index components: while the balance of the assessment of the situation rose from +4.7 to +12.0 percentage points, the expectation balance fell from + 21.6 to + 13.4 points.

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Economic Outlook September 2017

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