Eurozone economic sentiment declined more than expected to show the lowest reading since 1993 as the economy moves close to recession, a monthly survey from the European Commission showed Thursday.
The Economic Sentiment Index, or ESI fell to 80.4 in October from the downwardly revised 87.5 in September. The ESI showed its largest monthly fall and reached its lowest reading since 1993. The indicator also stood below the expected reading of 86.
The commission said confidence fell considerably across all sectors in October. Consumer confidence reached its lowest level in close to fifteen years, while services confidence fell to a record low. The consumer confidence index stood at minus 24 in October, down from minus 19. At the same time, services confidence fell to minus 6 from zero.
Economists were looking for a reading of minus 20 for consumer confidence and minus 2 for service confidence. Though the confidence in industry and construction eased in October, they remained clearly above the record lows reported in 1992 and 1993, respectively. Industrial confidence came in at minus 18 in October compared with minus 12 in September and construction confidence weakened to minus 20 from minus 16. Meanwhile, retail confidence stood at minus 13, down from minus 8.
Among the large member states, confidence deteriorated most markedly in the Netherlands, followed by France, Italy and the UK. The ESI stands clearly below its long-term average in all these nations.
In EU, economic sentiment worsened to 77.5 in October from 84.9 in the prior month. Economic sentiment fell for the seventh consecutive month in October as confidence worsened across all sectors.
Separately, the European Commission said Eurozone business climate fell to the lowest since 2001, suggesting that industrial activity remained subdued. The business climate indicator dropped to minus 1.34 from minus 0.82 in September. Economists had expected a reading of minus 0.91.
All five underlying components of the indicator declined in October. Assessment of managers' regarding future production, total order books and export order books deteriorated further. Meanwhile, stock of finished products and production trend observed in recent months worsened less.
Christoph Weil, analyst at Commerzbank said the eurozone is contracting and there are no signs of an early improvement. Employment is set to fall in the months ahead, leading to a weaker income growth and consumption and more job losses.
Analyst expects the European Central Bank to cut its key rate in the coming months despite high inflation expectations. "We envisage a first move next week on a scale of 50 basis points," Weil stated.
Earlier, ECB President Jean-Claude Trichet signaled that the ECB is prepared to cut interest rates for second month in November, assuming that upcoming data on inflation indicates a further alleviation of the upside risks to price stability.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.