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Eurozone Economic Confidence Weakens Amid Second Wave Of Infection

eurozone july31 27nov20 lt

Eurozone economic confidence weakened to a four-month low in November as new restrictions to curb the spread of Covid-19 weighed on sentiment among retailers, service providers and consumers, survey results from European Commission showed Friday.

The economic confidence index fell less-than-expected to 87.6 from 91.1 in the previous month. The expected reading was 86.5. This was the first fall in seven months.

Industry confidence edged down in November, ending its six months rally which had brought the indicator almost back to its level prior to the outbreak of Covid-19 in Europe.

The industrial sentiment index declined to -10.1 from -9.2 in the prior month. However, the score was above economists' forecast of -10.5.

The services confidence index dropped to -17.3 from -12.1 a month ago as managers' views on the past business situation, past demand and expected demand declined sharply.

Consumer sentiment weakened for the second straight month in November. The corresponding index came in at -17.6 versus -15.5 in October and matched flash estimate.

Households reported growing concerns about the expected general economic situation and their expected financial situation, which were matched by more cautious intentions to make major purchases.

As retailers' expected business situation nosedived and their appraisals of the present business situation and the adequacy of the volume of stocks got more tepid, the retail trade confidence posted an abrupt end to its six-month recovery.

Sentiment among retailers slipped to -12.7 from -6.9 in the previous month.

Construction confidence eased moderately due to worsened appraisals of the level of order books more cautious employment expectations. The construction sentiment index fell to -9.3 in November from -8.3 a month ago.

The survey showed that employment expectations deteriorated in November reflecting a sharp fall in expectations in retail trade, and moderately lower ones in services and construction.

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