The mood among German analysts and investors slumped in September to its lowest level in 10 months, hit by fears about slower exports to emerging markets, a survey by the ZEW think tank showed today.
Mannheim-based ZEW said its monthly survey showed economic sentiment in Europe's biggest economy more than halved to 12.1 points from 25 in August.
That fell far short of the consensus forecast of 18.4 in a Reuters poll of economists.
"The economic weakness in emerging countries is dampening the outlook for the export-oriented German economy," ZEW President Clemens Fuest said.
Economists cited the latest market turbulence in China which reflected worries about its economic outlook, although they also said Germany's recovery looked intact.
With strong demand for German cars and engineering machinery, China was Germany's fourth biggest export market last year, accounting for 6.6% of goods sold abroad.
But it is fading fast. In the first half of 2015, export growth to China was just 0.8% - the same as to crisis-burdened Greece, figures from the DIHK chambers of commerce show.
Berlin has played down the impact of China's slowdown for Germany, describing it as "limited" and the economy ministry still expects expansion of 1.8% both this year and next.
Economists were not too worried about the mixed messages from the survey, which also showed current conditions rising to 67.5 points from 65.7 points in August, surpassing expectations for a fall to 64.
Low commodity prices and the weak euro are still the best stimulant for the German economy, analysts said.
They said that up to now, neither China nor Greece have been able to substantially derail the German recovery.
Other recent data from Germany has been broadly positive, with German retail sales climbing at the strongest pace in nine months in July and private sector growth picking up.
In August, business morale rose, but the exports that drove a second-quarter expansion may falter later this year if China's slowdown hits the economy, the Ifo economic institute has said.
The ZEW index was based on a survey of 220 analysts and institutional investors conducted between August 31 and September 14.
