August 07, 2018

Economic Outlook – leading indicators at a glance

Germany – leading indicators continue to signal growth

The leading indicators for the German economy remain at a high level. Recently though, they have developed inconsistently. The Purchasing Managers' Index for the German Industry (Einkaufsmanagerindex) increased as well, reaching an all-time high of 63.3 points. The Economic Sentiment Indicator was also able to improve. After its decline in December 2017, the sentix Economic index picked up slightly at the beginning of the new year. By contrast, the Ifo Business Climate Index (Ifo-Geschäftsklimaindex) eased somewhat, reflecting weaker expectations. The assessment of the situation was more positive than in the previous month. The ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) also fell slightly. According to toll statistics, the truck performance was expanded to a similar extend as in the previous month.

Eurozone – leading indicators on the rise

The leading indicators for the Eurozone continue to show a positive economic development. The Sentix Economic Index (sentix-Konjunkturindex) rose again in January, with both the assessment of the situation and expectations improving. The Economic Sentiment Indicator (ESI) also continued to rise, for the Eurozone as well as for the EU as a whole. The manufacturing Purchasing Managers’ Index for the Industry (Einkaufsmanagerindex) climbed up to 60.6 points, a level never seen before. Only the ZEW Indicator of Economic Sentiment (ZEW-Konjunkturindikator) eased slightly.

The most recent quarterly Ifo Index for the Eurozone was published in November. The index has improved, with the balance rising from +35.2 to +37.0 percentage points.
However, the expected balance fell by 5.8 to +31.3 points, the balance of the situation assessment increased by 9.5 to +42.9 points.

World Economy – leading indicators are pointing upwards

The leading indicators for the global economy are pointing upwards as well. The OECD business climate index (OECD-Geschäftsklima) improved as did the German Federal Bank’s leading indicator (Bundesbank Frühindikator), both above their long-term average. The Purchasing Managers’ Index for the global Industry (Einkaufsmanagerindex) also continued to rise, reaching 56.7 points at the end of the year. The RWI Container Throughput Index also increased slightly, whereas the Baltic Dry Index declined over the past few weeks.

The most recent quarterly Ifo Index for the world economy was published in November 2017. Compared to the previous quarter, the index has increased by 3.9 points up to +17.1 points. This development goes back to an improvement of the assessment of the situation by 4.7 to +17.2 percentage points and an increase in expectations by 2.9 to +16.9 points.

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