The German investors and analysts who participated in the ZEW survey conducted between March 2 and March 16, were slightly less pessimistic about expectations six months ahead and slightly more pessimistic about current conditions. The excess of pessimists over optimists regarding the outlook declined from 5.8% in February to 3.5% in March, while the excess of pessimists regarding current conditions increased from 86.2% in February to 89.4% in March. The percent balances on current conditions and expectations are shown in the first chart.

The release of the January data for new orders in manufacturing and industrial production during the period of the survey, provided little evidence that current economic conditions were improving. Industrial production fell 7.5% in the month of January and new orders were down 8.0%. The year over year declines in new orders and industrial production, shown in the second chart, are significantly greater than those of the last recession.

The reduction from 2% to 1.5% in its key interest rate by the European Central Bank on March 5 may have played a role in the slight improvement in the participants expectations of the outlook six months ahead. And the stock market stopped declining. From March 2 to March 16, the Frankfurt Xetra Dax Index rose 9%.