The economic expectations index in Germany fell significantly in August

After several consecutive months of growth, the economic sentiment indicator in Germany, which is calculated by the ZEW research institute, dropped in August of the current year to 34.7 points compared to 52.7 points in July.

As explained by ZEW President Achim Wambach, financial market experts are disappointed with the announced trade agreement between the EU and the US. The indicator also declined significantly due to poor performance of the German economy in the second quarter of 2025.

«The outlook has deteriorated in particular for the chemical and pharmaceutical industries. The mechanical engineering, metallurgy, and automotive sectors have also been hit hard», Wambach noted.

The assessment of the current economic situation also worsened. This indicator for Germany settled at minus 68.6 points, which is 9.1 points below the previous month’s figure.

It should be noted that Germany’s GDP, based on the results of the second quarter, shrank by 0.1% quarter-on-quarter.

Recall that German metallurgical enterprises, based on the results of June 2025, reduced steel production by 15.4% compared to the same month in 2024, to 2.68 million t. Compared to the previous month, it fell by 9.2%. This figure has been declining for the sixth month in a row year-on-year. For January–June 2025, the country reduced steel output by 11.6% y-o-y to 17.11 million t.

Steelmaking enterprises are particularly suffering from weak domestic demand from key consuming sectors – construction, mechanical engineering, and the automotive industry.