Nov. 10 (Bloomberg) -- German investor confidence probably declined for a second month in November as the prospect of expiring government stimulus programs and rising unemployment tempered expectations for economic growth.

The ZEW Center for European Economic Research’s index of investor and analyst expectations slipped to 55 from 56 in October, according to the median of 39 forecasts in a Bloomberg News survey. ZEW releases the report, which aims to predict developments six months ahead, at 11 a.m. in Mannheim today.

The benchmark DAX share index has dropped 4 percent in the past month amid concern the economic recovery will slow next year when government stimulus measures peter out and rising joblessness constrains consumer spending. Exports, the main driver of German growth, may also falter as the euro’s appreciation makes them more expensive and if a rebound in global trade runs out of steam.

“Stock markets are in for a correction because the recovery isn’t sustainable,” said Costa Brunner, an economist at Natixis in Frankfurt. “Expectations will probably decline but there’s still room for current conditions to improve.”

ZEW’s gauge of the current economic situation probably rose to minus 70 from minus 72.2 in October, according to the survey of economists.

German exports and industrial production increased more than economists forecast in September, reports showed yesterday. Business confidence rose to a 13-month high in October and the country’s manufacturing industry grew for the first time in 15 months.

Economic Recovery

Germany emerged from its worst recession since World War II in the second quarter and the government last month raised its outlook for the economy, forecasting growth of about 1.2 percent in 2010 after a 5 percent contraction this year.

The recovery has helped push the DAX up 52 percent from its March trough, a trend matched across Europe’s stock markets. A quarter of the economists surveyed by Bloomberg forecast the ZEW index will rise this month.

“Industrial production is recovering and foreign demand is picking up, but the economy won’t take off,” said Jens Kramer, an economist at Norddeutsche Landesbank in Hanover. “The consequences of the recession for the labor market are yet to come and that puts private consumption at risk.”

Metro AG, Germany’s largest retailer, said on Nov. 3 that third-quarter profit declined 61 percent as rising joblessness eroded consumer spending across Europe, and forecast no improvement for the rest of the year.

Euro-area unemployment will surge to 10.9 percent in 2011 from 9.7 percent currently, according to the European Commission.

To contact the reporter on this story: Jana Randow in Frankfurt at jrandow@bloomberg.net

Last Updated: November 9, 2009 19:00 EST