German Recession Seems to Be Inevitable, Investor Survey Shows

(Bloomberg) -- Investors consider an economic recession in Germany inevitable, according to Sentix.

An index measuring current conditions and expectations for Europe’s largest economy fell to its lowest level in almost a decade, according to a survey. A similar gauge for the euro area dropped to the lowest since 2014.

The data suggest that de-escalating tensions between the U.S. and China at a Group of 20 meeting in Japan last month failed to inspire investors. Germany’s high dependence on exports and the Chinese market means ever greater uncertainty until the customs dispute is resolved.

While industrial production showed a monthly increase in May, performance is still down in annual terms.

“Today’s industrial data suggests that, at least for the second quarter, the German economy is running out of powerful growth engines,” said Carsten Brzeski, chief economist at ING Germany. “The data was not bad enough to panic but definitely not good enough to lean back and enjoy the summer.”

Elsewhere in the euro area, economic news have been equally subdued. An index tracking confidence among French industry dropped from 99 to 95 in June.

To contact the reporter on this story: Kristie Pladson in Frankfurt at kpladson@bloomberg.net

To contact the editors responsible for this story: Tom Contiliano at tcontiliano@bloomberg.net, Jana Randow, Carolynn Look

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