Eurozone economic sentiment remains depressed

Economic sentiment in the eurozone remained in the doldrums in January, according to a survey released by the European Commission on Tuesday.

The eurozone sentiment indicator nudged down to 96.2 from 96.3 in December, in line with consensus expectations.

The survey showed that small increases in sentiment in manufacturing and services were more than offset by declines in all other sectors, while consumer confidence fell.

Pantheon Macroeconomics said: "We are hopeful of a recovery in GDP this year; the surveys confirm our hunch that the recovery will be slow coming, though, supporting a dovish shift from the ECB.

"The ESI also shows that the share of firms in industry and services reporting that labour shortages are affecting production fell, in line with our forecasts that employment growth will slow and that the labour market will not remain as tight. On prices, though, the EC survey shows signs of rising price pressures again; selling price expectations in services and manufacturing rose in January, suggesting that underlying inflation remained sticky."