Geoffrey Smith 

Investing.com – The optimism about Germany’s economic prospects was surprisingly higher in May following the recovery of some small losses from Russia’s invasion.

Due to improved economic outlook assessments, the closely-watched index rose to 34.3 in May from 41.0 in April. Unfortunately, assessments of the deteriorated further: the subindex was again at -36.5. It was even worse than predicted.

The Mannheim-based ZEW said that while the index remained near historic lows due to renewed supply chain problems from China, any relief Germany can get to stop Russia’s sudden stopping of imports of energy was minimal. Although the EU plans to eliminate imports from Russia of oil and coal by the end the year, Germany successfully opposed imposing any timeline to stop gas supply.

The institute stated that China’s restrictions on covid are “a burden for Germany’s future economic growth.”

Similar reports were issued by industry Tuesday echoing the findings from ZEW’s survey. The results of the survey are taken from professionals economists. VDMA, the lobbying group representing the engineering sector, reported Tuesday that lockdowns had left “deep traces” on plant and machinery manufacturers in the area. It said that 98% companies that it surveyed had complained about being affected.

Nearly 50% of businesses had to close down completely because they were locked down, with 40% having to be shut down for more than three weeks.

The VDMA warned that a complete elimination of bottlenecks was not possible. VDMA stated that production is being resumpted, but especially in Shanghai, was slow.