Eurozone economic confidence weakened further in September, to a 15-month low, on trade protectionism and political uncertainty, survey data from the European Commission showed Thursday.
The economic sentiment index dropped more-than-expected to 110.9 in September from 111.6 in August. The indicator has decreased for the ninth straight month to reach its lowest since June 2017. The expected score was 111.2.
September’s fall in the economic sentiment adds to the evidence that economic growth is slowing, Jack Allen, an economist at Capital Economics, said.
This slowdown isn’t sharp enough to deter the European Central Bank from ending its asset purchases this year, but it supports the bank’s cautious approach to monetary tightening, Allen noted.
The decrease in sentiment resulted from lower confidence levels in the industry sector and among consumers, which were only partly offset by increases in the retail trade and construction sectors.
The industrial confidence index slid to 4.7 from 5.6 in August. The decline suggested a marked decrease in managers’ production expectations and a smaller worsening of their assessment of the stocks of finished products.
Similarly, the consumer sentiment index declined, as initially estimated, to -2.9 from -1.9 a month ago. The decrease reflected a broad-based deterioration in all its components in September.
The rise in retail trade confidence index to 2.7 from 1.9 in August was driven by more positive views on the present business situation and the adequacy of the volume of stocks.
The marked increase in construction confidence index to 8.3 from 6.4 resulted from a substantial improvement in managers’ assessment of the level of order books and a moderate increase in their employment expectations.
The business climate index remained unchanged at +1.21 in September. Managers’ production expectations as well as their views on the stocks of finished products worsened.
By contrast, managers’ appraisals of their overall order books, past production and export order books improved slightly.