The monthly ZEW survey has revealed a dip in German investor confidence for the first time in three months. According to the poll by the Mannheim-based economic think tank, published on Tuesday, economic sentiment fell to an unexpected low of 56.0.

Analysts had expected the ZEW index to jump to 59 points in October after it reached a three-year high of 57.7 points in September.

Despite signs of economic recovery in Germany - Europe's largest economy - analysts now predict more bumps in the road ahead.

"The assessment of the financial market experts reflects the prevalent opinion. The economy will improve only gradually," ZEW President Wolfgang Franz said in a statement.

The ZEW attributed the decline in investor confidence to a drop in exports in August - the last month for which data is available.

An increase in industrial orders and foreign demand have led many in Germany to feel hopeful that an economic recovery was about to take hold. However, analysts and senior policymakers say much of this is still due to government stimulus measures, and that the economy is not yet self-sustaining.

vj/dpa/reuters/AFP
Editor: Trinity Hartman