Economic confidence falls in Eurozone and EU as slowdown drags on
Confidence in the Eurozone economy fell for the 10th consecutive month in April as managers became markedly more pessimistic about industry as the continent’s slowdown continues.
April’s economic sentiment indicator, released by the European Commission, decreased by 1.6 points for the Euro area and 1.5 points in the European Union in April, compared to falls of 0.7 and 0.4 respectively in March.
The figures are yet more bad news for a region that is struggling economically, and will add to expectations of low economic growth.
Earlier this month the head of the Eurozone’s central bank, Mario Draghi, warned that “slower growth momentum is expected to extend into the coming year” due to US-China trade wars, the threat of US tariffs, Brexit negotiations and a weaker global economy.
The figures, which are compiled by asking managers their views on the economy, found that in the Eurozone’s manufacturing sector there was more pessimism about production expectations, the current level of overall order books and the stocks of finished products.
Consumer confidence in the Eurozone also fell, reflecting households’ more pessimistic expectations about their future financial situation and the general economic situation.
In the overall EU, confidence in the construction sector worsened more considerably than in the Eurozone.
The European Commission said: “In construction, the deterioration of employment expectations was less strong than in the euro area. Price expectations declined in line with those for the euro area in industry and construction; they also decreased in retail trade and services.”
In Britain economic confidence also fell. The economic sentiment indicator dropped to 99.3 in April from 100.8 in March, with 100 representing the 1990-2017 average.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The decision to delay the UK’s departure from the EU by six months has done little to revive confidence among business or consumers.”
He said: “Indeed, confidence among manufacturers and construction firms fell in April to 39 and 21 month lows, respectively.”
However, he noted that sentiment among UK retailers and service firms has recovered, while households remain slightly more upbeat than usual about their personal finances.