EU Economy
Business confidence fell in the Eurozone in August
By Finfacts Team
Aug 28, 2014 - 12:11 PM

Business confidence fell in the Eurozone in August according to the European Commission today.

In August the Economic Sentiment Indicator (ESI) fell in the Eurozone (by 1.5 points to 100.6) and the EU (by 1.2 points at 104.6).

Eurozone developments: After a broadly flat development over the last five months, August's decrease shifted the Eurozone headline indicator back to its December 2013 level. Worsened sentiment resulted from deterioration in retail trade, consumer, industry, and, to a lesser extent, services confidence.

Construction confidence remained broadly unchanged. Amongst the largest Eurozone economies, sentiment dropped significantly in Italy (-4.1), sending the ESI below its long-term average of 100, and in Germany (-1.9). Milder contractions were booked also in France (-0.6) and the Netherlands (-0.8), while sentiment remained flat in Spain.

EU developments: The relatively more moderate decrease of the headline indicator in the two largest non-Eurozone EU economies, the UK (-1.1) and Poland (-1.0), resulted in a less severe contraction for the EU ESI (-1.2) compared to the Eurozone. EU construction confidence improved, while, as in the Eurozone, industry, retail trade, services and consumer confidence slipped. Financial services confidence booked a more robust improvement (+1.9).

Business Climate Indicator broadly flat in August

In August 2014 the Business Climate Indicator (BCI) for the Eurozone remained broadly flat (at +0.16) compared to July (+0.17). Managers' more optimistic appraisals of past production and, to a lesser extent, export order books were offset by a marked decrease in their assessment of expected
production. Managers' views on the level of stocks of finished products and overall order books remained broadly unchanged.