Eurozone economic confidence remains stable in May

The economic sentiment indicator in the euro zone, which has been on a downward path since mid-2007, stood at 97.1 in May, the same with that in April. It was the lowest level since September 2005.

The monthly indicator, based on business and consumer surveys, dropped by 1.3 points to 96.7 in the European Union, according to revised figures. The surveys are conducted in different sectors of the economy, namely industry, services, construction and retail trade as well as consumers. The decrease in the sentiment indicator for the EU was due to lower confidence in manufacturing and construction and among consumers, while confidence in retail trade improved and remained stable in services.

In the euro zone, sectoral developments were somewhat different, with confidence remaining stable in manufacturing, decreasing among consumers and improving in services, retail trade and construction. The commission said the indicator of both the euro zone and the EU now stood below its long-term average. At the country level, most countries registered a decline in economic sentiment in May.

Among the large member states, confidence improved markedly in Italy, rising by 3%, though not enough to bring it above its long-term average, and remained almost stable in Germany, while confidence weakened further in Britain by 5.2% and by 3.3% in France.

Meanwhile, the business climate indicator (BCI) for the euro zone picked up slightly in May after a drop in April, the European Commission said in a separate report released Friday. The increase in the BCI was mainly due to an improvement in industry managers’ appraisals of the production trend in recent months. Managers’ assessments of their export order books deteriorated slightly, while their production expectations and their views on total order books and stocks of finished products remained unchanged. The commission said the downward trend of the BCI and the deceleration in industrial production registered in March point to a weakening of industrial activity in the Q2 of 2008. (Xinhua)