Investor Sentiment hits 16-month low

German investor confidence dropped more than forecast to a 16-month low in August, suggesting economic growth will slow from the record-breaking pace set in the second quarter.

The Mannheim-based ZEW Center for European Economic Research said its index of investor and analyst expectations, which aims to predict developments six months ahead, fell to 14 from 21.2 in July, its fourth straight decline. Economists had forecast a drop to 20, according to the median of 33 estimates in a Bloomberg News survey.

While Germany’s economy grew at the fastest pace in two decades in the three months through June, the recovery is being driven by exports and there are signs demand will wane. Factory orders in the U.S., the world’s biggest economy, fell more than economists forecast in June, while China’s manufacturing grew at the slowest pace in 17 months in July. European governments are also cutting spending to rein in ballooning budget deficits, threatening to slow growth across the 16-nation euro region, Germany’s biggest export market.

Bloomberg

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Dean Popplewell

Dean Popplewell

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