German economic sentiment deteriorates amid energy woes

German investor sentiment continued to deteriorate in September amid worries about the energy crisis and a slowdown in China, according to a survey released on Tuesday by the ZEW Center for European Economic Research in Mannheim.

The headline ZEW investor expectations index fell by 6.6 points from August to -61.9. Meanwhile, the current situation index slid to -60.5 in September from -47.6 the month before.

The gauge of economic sentiment regarding the eurozone fell 5.8 points to -60.7 points in September.

ZEW president Professor Achim Wambach said: "Together with the more negative assessment of the current situation, the outlook for the next six months has deteriorated further.

"The prospect of energy shortages in winter has made expectations even more negative for large parts of the German industry. In addition, growth in China is assessed less favourably. The latest statistical figures already show a decline in incoming orders, production, and exports."

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "Investor sentiment in Germany remained depressed at the end of the third quarter, consistent with the fall in the Sentix reported earlier.

"This picture is consistent with the deterioration in the economic outlook and the headwinds to growth and sentiment heading into winter. But it is likely a bit too pessimistic compared to the very recent rebound in risk assets, linked to the fall in gas prices and, it seems, news of Ukrainian success on the battlefield. It is far from clear to us that either of these two tailwinds will prove sustained, but at this rate investment confidence measures should improve slightly at the start of the fourth quarter."