Eurozone economic confidence weakened unexpectedly in April as Greece crisis started to dampen activity, a closely watched survey showed Wednesday. Meanwhile, bank lending grew for the first time in three years in March.
The economic sentiment index fell to 103.7 from 103.9, which was the highest score since July 2011, survey results published by the European Commission revealed. Economists had forecast the indicator to remain unchanged at 103.9 in April.
The decline was the first in five months. Yet, it was the second highest score since July 2011.
It remains to be seen if this is just a correction after recent significant gains, or signs that the improvement in Eurozone activity is leveling off, Howard Archer at IHS Global Insight said. It could be that heightened concerns over the Greek situation is having some dampening impact on sentiment, the economist added.
For now, April's survey serves as a reminder to forecasters and policymakers alike not to take a further strengthening of the Eurozone's fledgling economic recovery for granted, Jonathan Loynes, chief European economist at Capital Economics said.
Lending to euro area households and firms increased for the first time in three years in March and money supply growth accelerated more-than-expected after the announcement of quantitative easing by the European Central Bank.
Bank lending rose 0.1 percent in March from the prior year, reversing a 0.1 percent fall in February. Adjusted for loan sales and securitization, credit to the private sector climbed 0.8 percent, following February's 0.6 percent increase.
At the same time, M3 money supply grew 4.6 percent in March, faster than the 4 percent increase in February and an expected growth of 4.3 percent.
Demand for credit from businesses, and also from consumers, is highly likely picking up due to increased confidence in the current state of the Eurozone economy and the outlook resulting from low oil prices, the weakened euro and major ECB stimulus, Archer noted.
Data from EU showed that the industrial confidence indicator fell to -3.2 in April from -2.9 a month ago. While the appraisals of the current level of overall order books brightened and the assessment of the stocks of finished products remained fairly unchanged, production expectations deteriorated markedly in April.
On the other hand, services confidence improved on the back of managers' increased satisfaction with developments in the recent past demand and business situation. However, looking ahead, demand expectations became more cautious. The services sentiment index came in at 6.7 versus 6.1 in March.
Consumer confidence eased as a consequence of faltering optimism about macro-economic variables, notably the level of future unemployment and the future general economic situation. The index declined to -4.6, in line with flash estimate, from -3.7.
The level of retail trade confidence remained unchanged at -0.8 in April reflecting managers' positive judgments on the adequacy of the volume of stocks and the present business situation, coupled with reduced optimism concerning the expected business situation.
Meanwhile, the construction confidence indicator declined to -25.6 from -24.2, with managers revising their employment expectations significantly downwards, while keeping their appraisal of the level of order books broadly unchanged.
Another report from the European Commission showed that business confidence in the currency bloc rose to its highest level since May 2014. The indicator came in at 0.32 in April versus 0.23 in March.
While managers' assessment of past production improved significantly in April, their views on the level of overall and export order books improved slightly. Meanwhile, appraisals of the stocks of finished products remained broadly unchanged, whereas production expectations deteriorated.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.