Business confidence in the euro zone worsened further in April, mainly reflecting difficulties in the industrial sector, survey data revealed on Monday.
According to the European Commission, the economic confidence index in April was 95.6, down from 96.2 the previous month. The expected value was 96.9.
The business confidence index worsened particularly in the industrial sector, with service, retail, and construction industries showing moderate declines. The only thing that has improved since March is consumer confidence.
Reflecting the worsening evaluation of the current order backlog, the industrial confidence index fell from -8.9 in the previous month to -10.5.
The service confidence index in April was 6.0, down from 6.4 the previous month.
At the same time, the retail business confidence index fell to -6.8 from -6.0 in the previous month. Similarly, the Construction Sentiment Index declined from -5.6 to -6.0.
In contrast, the Consumer Sentiment Index stood at -14.7, unchanged from the preliminary figure and improved from -14.9 in March.
According to the survey, sales price expectations fell in service and retail industries, but remained stable in industrial and construction industries.
The European Commission's economic uncertainty index fell further. The employment expectations index was 101.8, lower than the March value of 102.5.
ING economist Peter Vanden Hout said: “Today's statistics show that the eurozone's economic recovery will continue to ebb and flow, at least for the time being.”
“There has been a very strong case for a rate cut in June, and while today's numbers didn't include any nasty inflation surprises, it seems almost certain that it will happen,” the economist added.
However, the economist expects the ECB's monetary easing to proceed at a snail's pace.
Franziska Palmas, an economist at Capital Economics, said the weaker-than-expected business and consumer survey was a reminder that the euro zone economy remained weak.
