Eurozone economic sentiment improved for a second straight month to set a fresh four-year high in August, led by domestic demand even as morale weakened in the industrial sector due to concerns over a stronger euro and a possible sharp slowdown in China.
The economic sentiment index rose to 104.2 from 104 in July, the European Commission said, while economists had forecast the indicator to fall to 103.8. The score was the highest since June 2011, when the index was 106.0.
"The increase shows resilience in the Eurozone economy, because it has not been affected much by the Chinese turmoil," ING Bank economist Bert Colijn said.
"The weak global environment is countered by improving domestic demand on the back of slow but steady labor market improvements and lower oil prices."
The services confidence index grew to 10.2 in August from 8.9 a month ago. That was also the best score in more than four years and reflected managers' significantly brighter views on demand expectations, the past business situation and, to a lesser degree, past demand.
Consumer confidence improved modestly as households were more positive regarding the future general economic situation. These were almost outweighed by their less optimistic views on future unemployment.
The consumer confidence index rose to -6.9 from -7.2 a month ago, which was slightly lower than the flash reading of -6.8. Nevertheless, this marked the first improvement in five months.
Meanwhile, the industrial sentiment index fell to -3.7 from -2.9 in July, the level being the weakest in six months. The weakness was due to managers' less optimistic views on the current level of order books and on the level of stocks of finished products.
The confidence index for the retail sector rose to 3.1 from 1.1 in July, mirroring managers' more positive views on both the present and the expected business situation.
The indicator for construction improved to -22.7 from -23.8. The positive development of confidence was fueled by upward revisions in managers' employment expectations and their assessment, to a lesser extent, of the level of order books.
Another report from the EU showed that the business confidence index fell to 0.21 in August from 0.41 in the previous month. Managers' assessments of the level of past production, export and total order books, as well as the stocks of finished products, deteriorated, while their production expectations remained broadly unchanged.
"Overall, today's survey continues to suggest that economic growth remains very slow in the euro-zone and certainly too weak to erode the spare capacity in the region and thereby provide a boost to inflation," Capital Economics Jessica Hinds said.
"As such, the ECB may come under growing pressure to increase the pace of its asset purchases."
For comments and feedback contact: editorial@rttnews.com
Economic News
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.
May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.