Economic confidence in the euro zone fell to a 10-month low in June, while business sentiment remained generally stable, despite trade disputes with the US, data showed the European Commission on Thursday.
The economic sentiment index fell to 112.3 in June from 112.5 in May. The index was the lowest since August last year, but it remained above the expected figure of 112.0.
The index of industrial confidence remained at the level of 6.9, while the decline was predicted to be 6.4. The moral spirit remained unchanged, as managers' expectations for higher production figures were compensated by more pessimistic views on the current level of general order books.
Similarly, the sentiment index in the service sector remained unchanged at 14.4 in June. The stable confidence in the services is due to the managers' unchanged assessment of the past business situation, while their more vivid views on past demand were offset by the worsening expectations of their demand.
Meanwhile, the retail confidence indicator slightly increased to 0.8 in June from 0,7 in the previous month. The marginal growth is mainly due to more positive views on the expected business situation, which were partially offset by the deterioration of the managers' assessment of the previous business situation.
Meanwhile, the consumer sentiment index fell to -0.5 in June from +0.2 a month ago. The indicator was in line with the preliminary assessment. The decline in consumer confidence reflected more negative estimates of the future general economic situation, future unemployment and expectations of savings.
The confidence index in construction was 5.6 against 7.1 in the previous month. The decrease in confidence in the construction sector was the result of a revision of the expectations of the employment of managers and their assessment of the level of orders.
Another EU report showed that the business climate index fell to 1.39 in June from 1.44 in May.
their general and export order books deteriorated noticeably, and their estimates of past products and finished goods stocks remained virtually unchanged.
Jessica Hinds, an economist at Capital Economics, said that a small decline in the index is not a cause for concern. The EU economic sentiment indicator provides additional evidence that the softness in activity recorded in the first quarter does not mean the beginning of a sharp decline.