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Economic Sentiment Dips Further, However Outlooks Improving in August

EUROZONE DATA
MNI (London)

EUROZONE AUG ECONOMIC SENTIMENT INDEX 97.6 (FCST 98.0); JUL 98.9r

EUROZONE AUG INDUSTRIAL CONFIDENCE 1.2 (FCST 2.4); JUL 3.4r

EUROZONE AUG SERVICES CONFIDENCE 8.7 (FCST 8.8); JUL 10.4r

EUROZONE AUG CONSUMER CONFIDENCE -24.9 (FLASH CONFIRMED); JUL -27.0

  • Sentiment indicators for the eurozone aggregate weakened further in August, all falling slightly lower than anticipated levels. However, fresh improvements in outlooks in the detail of the report are not to be discounted.
  • Economic sentiment weakened by 1.3 points to 97.6, whilst industrial confidence saw the largest decline of 2.2 points to 1.2 and services by 1.7 points to 8.7. The largest declines in overall sentiment were recorded by the Netherlands (-4.8) and Germany (-2.5), whilst Spain saw a small improvement (+0.8).
  • Consumer confidence was confirmed at -24.9, a modest improvement on the July record low as future expectations were better.
  • Industry was the key driver of weakening confidence, dampening for the sixth consecutive month as demand faltered. Services confidence also saw a decline.
  • For both sub-indices improvements were however seen in expectations, hinting at a shift towards more optimistic outlooks. Stabilisation was noted in the retail and construction sectors.
  • Price expectations declined again in August, implying both consumers and industry anticipating inflation to be moving beyond the peak. This alongside the shift towards more optimistic sentiment regarding future economic conditions will be welcome news for the ECB, despite headline figures remaining downbeat.


Source: European Commission

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