German Investor Sentiment Falls Slightly in November

Germany’s ZEW Indicator of Economic Sentiment jumped to 59.6 in January 2026, marking its highest reading since July 2021 and well above market expectations of 50. Investors are optimistic that 2026 could signal a turning point for the economy. The recently finalized Mercosur trade agreement is also expected to bolster prospects for export-intensive sectors, even as the uncertainty surrounding US trade policy continues to weigh on exporters. Export-oriented industries have shown notable improvements. Sentiment balances in the steel and metal industries and mechanical engineering rose by 18.2 and 22.7 points, respectively. The automotive sector’s balance improved by 16.5 points to -5.5, while the chemical and pharmaceutical industries and electrical engineering saw increases of 12.4 and 14.0 points. The assessment of the current economic situation also strengthened, with the index climbing 8.3 points to -72.7, surpassing expectations of -75.5.

Germany’s ZEW Indicator of Economic Sentiment rose sharply to 45.8 in December 2025, the highest in five months, compared to 38.5 in November and well above forecasts of 38.5. Improvements were seen in the auto sector (+7.7 to -22) and in other export-oriented sectors, including the chemical and pharmaceutical industries and metal production. “xpectations have become more positive. After three years of economic stagnation, chances for a recovery of the economy are good and this is reflected in the sentiment. The expansive fiscal policy will provide new momentum to the German economy. However, the recovery remains fragile. Measures for dealing with persistent trade conflicts, geopolitical tensions and the absence of investments are likely to figure on the reform agenda for 2026 as well”, according to ZEW President Prof. Achim Wambach. On the other hand, the current conditions gauge worsened to -81, the lowest since May, from -78.7 in April and compared to forecasts of -80.

Germany’s ZEW Indicator of Economic Sentiment slipped to 38.5 in November 2025, down from October’s three-month high of 39.3 and below market expectations of 40, reflecting waning confidence in the government’s ability to implement effective economic policies. “The investment program should provide an economic stimulus, but structural problems persist,” said ZEW President Prof. Achim Wambach. The outlook is particularly weak for the chemical and metal industries, while the banking and insurance sectors also registered declines compared with last month. In contrast, private consumption saw a notable improvement, rising 13.3 points, and the electrical engineering, service, telecommunications, and IT sectors posted modest gains. Meanwhile, the current economic conditions index rose 1.3 points to -78.7 in November.