15. April 2016

Economic Outlook, April 2016

Germany - Modest improvement at a low level

The leading indicators for Germany have recovered slightly, but remain at a low level. The ifo Business Climate Index (ifo-Geschäftsklimaindex) improved marginally, as did the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) and the Purchasing Managers’ Index for the German Industry (Einkaufsmanagerindex). The latter sits at 50.7 points, only just remaining above the growth threshold of 50. The Sentix Economic Index (sentix-Konjunkturindex) rose moderately as well, but only due to improved business expectations. The assessment of the business situation decreased slightly compared with March. The Economic Sentiment Indicator also lost ground again.

The data on the mileage of trucks (according to the toll statistics) currently do not provide a reliable indication. An extension of the toll road network in July 2015 means the numbers cannot be compared to the previous year.

Eurozone - Leading indicators show differentiated trends

The leading indicators for the Eurozone do not provide a clear picture. The Economic Sentiment Indicator and the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) both decreased, whereas the Purchasing Managers’ Index for the Industry in the Euro area (Einkaufsmanagerindex) managed to rise above the growth threshold to 51.6 points. The Sentix Economic Index (sentix-Konjunkturindex) also increased slightly, reflecting a more negative assessment of the business situation but improved expectations.

The latest quarterly ifo Index for the Eurozone was published in January 2016. It showed an improvement in the assessment of the business situation compared to three months ago, but also a noticeable decrease in business expectations for the upcoming months – causing the overall index to fall.

World Economy - Global leading indicators remain weak

The leading indicators for the world economy continue to be weak. The OECD-leading indicator and the German Federal Bank’s leading indicator (Bundesbank Frühindikator) decreased again and now lie markedly below their long-term average. The Purchasing Managers’ Index (Einkaufsmanagerindex) for the industry improved marginally above the growth threshold to 50.7 points. The freight index recorded a slight uptick, as did the Baltic Dry Index which remains at an extremely low level.

The latest quarterly ifo Index for the World Economic Climate was published in January 2016. It showed a slight decline of both the current economic situation and of the business expectations compared to three months ago.

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Economic Outlook, April 2016

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Dagmar Cassan

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