Eurozone Economic Confidence Near 3-Year Low

(RTTNews) - Eurozone economic sentiment dropped marginally to a near three-year low in October, largely reflecting deteriorating confidence in industry and retail trade, survey data from the European Commission showed Monday.

The economic confidence index fell marginally to 93.3 in October from 93.4 in the previous month. This was the lowest reading since November 2020 but above economists' forecast of 93.0.

Industry confidence continued to remain negative as the stocks of finished products were increasingly assessed as too small or below normal, while managers' assessment of the current level of order books deteriorated. The corresponding index posted -9.3, down from -8.9 in September.

On the other hand, the services confidence indicator rose to 4.5 from 4.1, thanks to the significant improvement in managers' demand expectations, partially offset by a worsened assessment of past demand and a stable assessment of the past business situation, the survey showed.

The consumer confidence index slid to -17.9, in line with flash estimate, from -17.8 a month ago. Consumers' improved views on their household's past financial situation and intentions to make major purchases were offset by worsened expectations about their future financial situation and the general economic situation.

Confidence among retailers decreased markedly, reflecting worsened assessments of developments in the past business situation as well as stocks that were more often considered as too large or above normal. The index registered -7.8 compared to -5.7 in the prior month.

Construction confidence was virtually stable at -5.9, as builders' employment expectations improved marginally but their assessment of the level of order books remained broadly inert, the survey revealed.

The Employment Expectations Indicator also remained broadly stable in October as lower employment plans among industry and retail trade managers were largely offset by managers' improved employment plans in services and construction.

Capital Economics' economist Jack Allen-Reynolds said the survey added to the evidence that the euro-zone economy is contracting. The labor market still looks tight but labor shortages are easing gradually.