17. May 2016

Economic Outlook, May 2016

1. Germany - Uneven development

The leading indicators for Germany remain weak overall and provide no consistent picture. The ifo Business Climate Index (ifo-Geschäftsklimaindex) stagnated as companies were less satisfied with the current situation, but expressed slightly improved business expectations. The Economic Sentiment Indicator also remained virtually at the same level. The Sentix Economic Index (sentix-Konjunkturindex) went up marginally due to a brighter assessment of the current situation, while business expectations remained unchanged. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) and the Purchasing Managers’ Index for the German Industry (Einkaufsmanagerindex), which now lies above the growth threshold at 51.8 points, both showed an increase. 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.

2. Eurozone - Only slight improvement of some indicators

Some leading indicators for the Eurozone have recovered slightly. The Economic Sentiment Indicator, the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) and the Purchasing Managers’ Index for the Industry in the Euro area (Einkaufsmanagerindex) all showed an improvement. At 51.7 points it now sits above the so-called growth treshold of 50 points. The Sentix Economic Index (sentix-Konjunkturindex) also rose marginally, reflecting an improved assessment of the current situation. The business expecations remained unchanged.

In contrast, the quarterly ifo Index for the Eurozone has fallen. Both the assessment of the current business activity and the business expectations decreased in the last three months.

3. World Economy - Global leading indicators point downwards

The leading indicators for the world economy remain weak. The OECD-leading indicator continues to stand at a level that is far below the historical trend. The German Federal Bank’s leading indicator (Bundesbank Frühindikator) has decreased, as did The Purchasing Managers’ Index (Einkaufsmanagerindex) for the industry. At only 50.1 the latter no longer registers above the growth threshold. Likewise, the two freight indicators both slumped recently.

The latest quarterly ifo Index for the World Economic Climate has also fallen. Altough the assessment of the current economic situation rose marginally, the business expectations dropped in the last three months.

economic report
Economic Outlook May 2016


Volker Leinweber

Volkswirtschaftliche Grundsatzfragen

Volker Leinweber