Economic sentiment took a hit across the eurozone and EU in April as employment expectations fell, according to survey data released on Monday.
The European Commission's Economic Sentiment Index (ESI) both showed slight declines, with the EU down 0.3 points to 96.2, and the Eurozone down 0.6 points to 95.6.
Similarly, the Employment Expectations Index (EEI) experienced a more pronounced decline in both regions, with the EU down 0.5 points to 101.7 and the Common Monetary Area down 0.7 points to 101.8.
However, despite the decline, EEI remained above the long-term average.
“Eurozone business confidence fell in April, contradicting the positive message from other surveys to date,” the analysts said. oxford economics.
“Among the largest countries, France was surprised by the downturn, with significant month-on-month declines.”
The slight decline in ESI within the EU was due to a slight decline in confidence in industry and services, while confidence in retail trade, construction and consumer sentiment remained relatively stable.
In particular, significant changes were observed in the EU's largest economies, with a notable decline in France (-4.8), but improvements in Spain, Germany and Poland.
While industry confidence declined due to management's assessment of the current overall order book, service confidence also declined, primarily due to deteriorating assessments of historical and projected demand.
“Overall, at the sector level, declines occurred at both the industry level and the service level.” oxford economics Added.
“Although it was probably at the industry level that caused France's sharp decline, this suggests that there is still a significant disconnect between the thriving services sector and the weak manufacturing sector.
“While we expect cyclical improvements in the industrial sector to lead to narrowing inequality, growth this year will be primarily driven by services.”
Consumer confidence was essentially flat as improvements in household finances were offset by concerns about the overall economic situation.
Employment forecasts fell slightly, particularly in industrial and retail trade, although the construction sector offered more optimistic plans.
Consumer unemployment expectations have worsened slightly.
Sales price expectations fell in the service and retail industries, but remained stable in the industrial and construction industries.
The European Commission's Economic Uncertainty Index further declined, reflecting reduced uncertainty about future business and financial conditions.
The worker stockpiling index also showed a slight decline, remaining slightly above the long-term average but well below the peak levels observed during the coronavirus crisis.
Oxford It said first-quarter GDP data for the euro zone is expected to rise by 0.2% on a quarterly basis, after being flat in the final quarter of last year.
“However, today's data shows that momentum will build very gradually, with only the second half of this year registering an acceleration in GDP.”
Report by Josh White of Sharecast.com.
