Eurozone Economic Confidence Near 2-Year Low

eurozone 112819 29sep22 lt

Eurozone economic confidence weakened to the lowest level in nearly two years in September as all surveyed business sectors reported marked declines, signaling a recession in the currency bloc, survey results from European Commission showed Thursday.

The economic confidence index declined more-than-expected to 93.7 in September from 97.3 in the previous month. The index hit the lowest since November 2020. The expected score was 95.0.

The industrial confidence indicator turned negative for the first time since February 2021. The indicator came in at -0.4 versus +1.0 a month ago. But the score remained above economists' forecast of -1.0.

The services sentiment index slid to 4.9 in September, down from 8.1 in the prior month and the expected score of 7.0.

At -28.8, the consumer confidence index reached an all-time low, as estimated, from -25.0 a month ago.

Retailers' confidence deteriorated to -8.4 in September after improving to -6.5 in the prior month. Similarly, the construction confidence index fell to 1.6 from 3.4.

The commission said the mild decrease in the employment expectations indicator by 1.2 points to 106.7 was driven by deteriorated employment plans in industry and construction.

At the same time, selling price expectations rose again in all surveyed business sectors. Consumer price expectations also picked up further. The survey was conducted between September 1 and 26.

With Russia squeezing gas supplies and inflation set to remain high for several more months, a recession in the euro-zone is unavoidable, Capital Economics' economist Anna Padt said.

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