2018.06.2808:13:00UTC+00Eurozone Economic Confidence At 10-Month Low

Eurozone economic confidence deteriorated moderately to a 10-month low in June, while business sentiment remained broadly stable despite trade disputes with the U.S., data from the European Commission showed Thursday.

The economic sentiment index fell to 112.3 in June from 112.5 in May. This was the lowest since last August but remained above the expected score of 112.0.

The industrial confidence index held steady at 6.9, while it was forecast to drop to 6.4. Morale remained unchanged as managers' brighter production expectations being offset by more pessimistic views on the current level of overall order books.

Likewise, the services sentiment index remained unchanged at 14.4 in June. Stable services confidence resulted from managers' unchanged assessment of the past business situation, while their brighter views on past demand were offset by the deterioration of their demand expectations.

Meanwhile, the confidence indicator for retail trade rose slightly to 0.8 in June from 0.7 in the previous month. The marginal growth was mainly due to more positive views on the expected business situation, which were partly offset by the worsening of managers' assessment of the past business situation.

Meanwhile, the consumer sentiment index slid to -0.5 in June from +0.2 a month ago. The score matched the flash estimate. The decrease in consumer confidence reflected more negative assessments of the future general economic situation, future unemployment and their savings expectations.

The confidence index in construction came in at 5.6 versus 7.1 in the previous month. The drop in construction confidence resulted from downward revisions of both managers' employment expectations and their assessment of the level of order books.

Another report from the EU showed that the business climate index dropped to 1.39 in June from 1.44 in May.

Managers' appraisals of their overall and export order books worsened markedly, while their assessments of the past production and the stocks of finished products remained virtually unchanged.

Jessica Hinds, an economist at Capital Economics, said the small decline in ESI is no cause for concern. The EC's measure of economic sentiment provides further evidence that the softness in activity recorded in the first quarter does not mark the start of a sharp downturn.