15. November 2016

Economic Outlook, November 2016

1. Germany – Rising tendency

Leading indicators for the German economy are pointing upwards. The Ifo Business Climate Index (Ifo-Geschäftsklimaindex) has risen as well as the sentix Economic index (sentix-Konjunkturindex). In both cases, the assessment of the situation and the business expectations have improved. The Purchasing Managers’ Index for the German Industry (Einkaufsmanagerindex) has reached a new annual peak at 55,0 points. The Economic Sentiment Indicator continues to rise as well. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) on the other hand is only slowly picking up. The data on the mileage of trucks reflects a slight decrease compared to last month according to the toll statistics.

2. Eurozone – Optimistic business expectations

Leading indicators for the eurozone are going up as well. The sentix Economic index continues to rise - reflecting an improved assessment of the current situation as well as brighter business expectations. The Economic Sentiment Indicator for the eurozone as well as the one for the entire European Union have increased to the same degree. The Purchasing Managers’ Index for the Industry in the eurozone went up to 53.5 points and is again well above the growth threshold of 50 points. The ZEW Indicator of Economic Sentiment for the eurozone is improving at a low level. In the fourth quarter, the Ifo index for the eurozone has gone up due to optimistic business expectations. At the same time, the assessment of the current situation is unchanged.

3. World Economy – Mixed developments

Global leading indicators are also generally improving, albeit not uniformly. The German Federal Bank’s leading indicator (Bundesbank Frühindikator) continues its upswing and is now well above its long-term average. The OECD business climate index could not keep up and is currently faltering. The global Purchasing Managers’ Index on the other hand is improving. With 52.2 points it is above the growth threshold.

The Container Throughput Index is moderately going up whereas the Baltic Dry Index has been ailing in the past month. The latest quarterly results of the Ifo World Economic Climate from July show a downward tendency. Although the assessment of the economic situation remained unchanged, the business expectations dropped sharply compared to the previous quarter.

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Economic Outlook, November 2016

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