Business confidence in Europe sees summer fall

Business confidence in the eurozone fell notably over the summer according to today’s update to the European Commission’s Business Climate Indicator.

Business confidence in Europe sees summer fall

In August the BCI for the euro area decreased by 0.36 points to +0.02. Managers’ assessments of past production, the level of overall and export order books all “deteriorated markedly,” the commission said.

Production expectations worsened much less however, and views on the stocks of finished products remained stable.

The Economic Sentiment Indicator, which brings together a range of sentiment readings across consumers and industry, also fell in August by 1 point to 103.5.

The deterioration of euro-area sentiment resulted from weakened confidence in all business sectors but construction and among consumers were the standouts.

The ESI also declined in four of the five largest euro area economies; the Netherlands (-3.6), Italy (-2.1), Spain (-1.5) and Germany (-1.1), while France bucked the trend with an increase (+0.8).

The falls in these measures will raise fresh concerns that the European Central Bank’s stimulus efforts are running out of time to have the desired impact.

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