Economic confidence softens across the Eurozone

Economic sentiment in the Eurozone has softened, a closely-watched survey showed on Thursday.

The European Commission's Economic Sentiment Indicator fell to a seven-month low of 95.3 in June, down from 96.4 in May. It was also below consensus, for 96.0, as well as the long-term average.

The decline was noted across all sectors, with manufacturing, retail, construction and services all posting weaker sentiment.

Services sentiment fell to 5.7 from 7.1 a month earlier, while industrial sentiment came in at -7.2, against -5.3 in May.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: “Overall, these data are consistent with other surveys indicating that economic momentum faded at the end of the second quarter.

"We are sticking with our view with Eurozone GDP growth will languish around zero in the second and third quarters, below the European Central Bank’s forecasts.”

Tomas Dvorak, senior economist at Oxford Economics, said: “The fourth decline in the last five months adds to a growing set of indicators pointing to a slowing economic momentum in the Eurozone, and tallies with our assessment of only lacklustre growth in the remainder of 2023.

“The declines in sentiment were also relatively uniform across the Eurozone economies: Germany, Italy, the Netherlands and Spain all recorded similar size declines in the headline ESI measure. Bucking the trend was France, which actually saw economic sentiment improving in June – albeit this was after a poor run earlier in the year, only bringing it in line with the Eurozone average.”