Eurozone economic sentiment weakens in September
By Abigail Townsend
Date: Friday 27 Sep 2024
(Sharecast News) - Confidence eased across the eurozone in September, an official survey released on Friday showed, as the bloc's economic recovery struggled to take hold.
The European Commission's latest economic sentiment indicator fell 0.3 points to 96.2, reversing much of August's surprise 0.6 uplift.
Across the wider region, the ESI was unchanged at 96.7.
Consumer confidence improved 0.5 points, while construction edged 0.4 points higher.
Offsetting that, however, was a 0.1 dip in retail trade and notable 0.8 slide in industry confidence.
Among member states, the Commission noted that the ESI had worsened "markedly" in some of the bloc's biggest economies, including France - down 1.4 points - and Germany, off 1.2 points.
Germany is the eurozone's biggest economy and is heavily reliant on manufacturing.
The employment expectations indicator remained largely flat in both regions, at 99.5 in the eurozone and 100 in the wider bloc.
Bert Colijn, chief economist, Netherlands, at ING, said: "Weaker growth prospects and easing inflation concerns show a clear turning in Eurozone sentiment at the moment, which adds dovish pressure on the European Central Bank.
"All main Eurozone surveys for September have now come in weak, and this means that with inflation relatively benign, the focus for policy makers is shifting from inflation to growth worries at this point."
Rory Fennessy, senior economist at Oxford Economics, said: "The September ESI reinforces the message sent by other leading indicators that a quick turnaround in Eurozone growth prospects remains elusive.
"We do not anticipate growth to pick up meaningfully in the near term, with a much less frontloaded recovery now expected."
The ECB cut interest rates for the second time this year in September to 3.5%. Inflation now stands at a three-year low of 2.2%, marginally ahead of the bank's long-term 2% target.
The ESI is a composite indicator combining both judgements and attitudes of both consumers and businesses from across sectors.
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