In the September ZEW survey, released today, German analysts and institutional investors were only slightly more optimistic about the next six months than they were in August. The ZEW balance of optimists over pessimists rose only 1.2 percentage points from 56.1% to 57.7%. The views of the financial community tend to be considerably more volatile than the views of those engaged in industry, trade and services. The latter represented in the IFO measure of German economic opinion, were still showing an excess of pessimism regarding the outlook for the next six months of 7.7% in August. The two measures are shown in the first chart. The correlation between the two series is only .41 suggesting that the two groups frequently differ as to the outlook.

The German investors were also subdued in appraising the current situation. The excess of pessimists regarding the current situation declined only 3.2 percentage points to 74.0 from 77.2 in August. Again, the views of the financial community are more volatile than those of the participants in the IFO survey. The excess of pessimists among the latter was only 31% in August. In contrast to their often divergent views on the outlook the two communities tend to view the current outlook similarly. In spite of the greater volatility, the views of the financial community move in the same direction as that of the business community, as attested by the high degree of correlation--.94--between the two series shown in the second chart.

According to the President of ZEW, Prof, Dr. Dr. h.c. mult. Wolfgang Franz, "The economic expectations for Germany are consistent with the picture that the Germany economy is recovering, but at a slow pace."