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Eurozone economic confidence weakens further

The economic confidence in the euro zone weakened further in December last year, while business climate indicator was in decline, the European Commission said Monday.

The economic sentiment indicator in the previous 13-nation bloc sharing the same currency stood at 104.7 in December, slightly down by 0.1 point from that in November. It was the seventh consecutive month that the economic confidence weakened. Cyprus and Malta adopted the euro at the beginning of this year, bringing the total number of eurozone countries from 13 to 15. The monthly indicator, based on business and consumer surveys, also declined by 0.4 point to 107.1 in the 27-nation European Union, according to revised figures.

In both the euro zone and the EU, the decline is reflected in the indicators for the industry, retail trade, and construction sectors. In addition, consumer confidence dropped in the euro zone, while it remained unchanged in the EU. In both areas, the confidence indicator for the services sector was the only one that has improved. Despite the continuous worsening, the commission said the indicator still remained well above its long-term average in both areas. At the individual country level, a large majority reported decreases in sentiment in December. Among the large EU member states, confidence deteriorated in Germany, Britain and France by 0.3 point, 1.2 points and 0.9 point each.

Meanwhile, the business climate indicator (BCI) for the euro zone dropped in December, the European Commission said in a separate report released Monday. The decrease in the BCI is essentially caused by a worsening of industry managers’ assessment of the production trend observed in recent months. To a lesser extent, managers’ assessments of their production expectations and total order books also contributed to the decline. The views of stocks of finished products and export order books remained unchanged. The commission said the BCI was still at a relatively high level, which suggests that economic activity in the industrial sector will continue to grow at a solid pace. (