Eurozone economic sentiment remained unchanged in April as stronger morale among consumers and industries was offset by a deterioration in confidence among services, retail and construction firms.
The economic sentiment index held steady at 112.7 in April, survey data from the European Commission showed Friday. The score was forecast to drop to 112.0.
The stable reading provides further reassurance that the weakness of activity in the first quarter does not mark the start of a sharp slowdown, Jessica Hinds, an economist at Capital Economics, said.
Today’s data echo the message from the composite Purchasing Managers’ Index that euro-zone GDP growth is likely to pick up after what looks like a weak first quarter, the economist added.
Among components, the consumer confidence indicator came in at 0.4 versus 0.1 a month ago. The reading came in line with flash estimate.
The improvement in consumer confidence reflected households’ historically optimistic expectations regarding future unemployment, improved savings expectations and slightly brighter views on their future financial situation.
At the same time, the industrial confidence index rose slightly to 7.1 in April from 7.0 in the previous month. Broadly stable industry confidence was the result of managers’ markedly improved production expectations meeting a worsened assessment of the current level of overall order books, the survey showed.
Meanwhile, the services sentiment index dropped to 14.9 from 15.9. The decline was driven by managers’ significantly worsened assessment of the past business situation and more pessimistic appraisals of past demand.
Similarly, the retail trade confidence indicator slid to -0.6 versus +0.7 a month ago. The drop in retail trade confidence was fueled by markedly deteriorating appraisals of the past business situation and worsening views on the adequacy of the volume of stocks.
The construction sentiment index fell to 4.5 from 5.2 in the previous month. The slight decrease in construction confidence resulted from downward revisions in both managers’ employment expectations and their assessment of the level of order books.
Another survey showed that the business confidence index remained broadly unchanged in April. The index score was 1.35 versus 1.44 in March.
Managers’ appraisals of the past production and overall order books worsened markedly. Meanwhile, managers’ production expectations improved substantially. Only their assessment of the stocks of finished products remained virtually unchanged.