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Eurozone Economic Sentiment At 1-Year Low


Eurozone economic confidence deteriorated more-than-expected to one-year low in August on political and global trade concerns, a closely watched survey revealed Thursday.

The economic sentiment index dropped to 111.6 in August from 112.1 in July, data from European Commission showed. The expected score was 111.9. A similar lower reading was last reported in August 2017.

A cruising speed of 0.4 percent GDP growth in the euro area now looks like the best case scenario as global economic and political concerns cause Europeans to be less optimistic by the month, Bert Colijn, an economist at ING said.

According to EU survey, the decrease in the economic sentiment indicator resulted from a marked deterioration of confidence among consumers and a milder fall in the services sector, which were only partly offset by increases in the retail trade and construction sectors.

The industrial confidence index came in at 5.5 in August, in line with forecast, but down from 5.8 a month ago. Managers' more optimistic production expectations were almost offset by the worsening assessment of the current level of overall order books and the stocks of finished products.

Likewise, the services sentiment index slid to 14.7 from 15.3 a month ago. The slight deterioration resulted from managers' significantly lower demand expectations and slightly worse assessments of the past business situation.

The consumer confidence index declined to -1.9, as initially estimated, from -0.5 in the previous month, mainly due to a deterioration in consumers' assessment of the future unemployment.

Meanwhile, the confidence index in the retail sector rose to 1.7 from 0.3 a month ago. This marked rise was fueled by more positive views on the present business situation and the adequacy of the volume of stocks.

The increase in construction confidence to 6.4 from 5.4 in July, resulted from upward revisions in both managers' employment expectations and their assessment of the level of order books.

Another report from EU showed that the business climate index dropped to 1.22 in August from 1.30 in July.

Managers' appraisals of their overall order books and past production worsened markedly, while their views on export order books and the stocks of finished products merely edged down.

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