Confidence in the euro zone is falling along with the economic picture, and it’s doing so faster than predicted. An index of executive and consumer sentiment has fallen more than economists’ expectations as the financial gloom spreads.
Bloomberg reported Thursday that, according to the European Commission (EC) in Brussels, an index of executive and consumer sentiment in the 17-country euro area dropped to 92.8 from a revised March figure of 94.5. Economists had expected it only to fall to 94.2 from the originally reported 94.4.
“With more austerity in the pipeline and the debt crisis still unresolved, any significant pickup in economic confidence in the remainder of this year might fail to occur,” Martin van Vliet, an economist at ING Group in Amsterdam, said in the report. “This could jeopardize a return to modest positive growth later this year.”
The Rome-based national statistics institute Istat said that Italian business confidence reached its lowest level since October 2009. An index of European manufacturer sentiment fell to -9 from a March level of -7.1. Not to be outdone, a services confidence indicator slid to -2.4 from -0.3, and an indicator of consumer sentiment fell to -19.9 from -19.1. This month also saw sentiment in the construction industry fall.
It “is a thoroughly depressing survey all around,” Howard Archer, chief European economist at IHS Global Insight in London, said in the report. “Indeed, April’s marked drop in euro zone consumer and business confidence means that the gains in sentiment made in the first two months of the year have been wiped out.”