Eurozone Economic Confidence Weakest In 6 Months

(RTTNews) - Eurozone economic confidence weakened to a six-month low in March and price expectations increased after the outbreak of the Middle East war, monthly survey results from the European Commission showed Monday.

The economic confidence index fell to 96.6 in March, the highest since last September, from 98.2 in the previous month. The score was seen at 96.5.

The decline in the economic sentiment index was driven by considerably lower confidence among consumers and retailers and, to a much smaller extent, services managers. On the other hand, confidence improved in industry and construction.

The industrial sentiment index rose unexpectedly to -7.0 from -7.2 a month ago. The reading was forecast to fall sharply to -9.0.

The services confidence index edged down to 4.9 from 5.0 in February, while it was forecast to drop sharply to 4.0.

The final consumer confidence index declined to -16.3, in line with flash estimate, from -12.3 in the prior month.

Confidence among retailers declined in March with the corresponding index falling to -7.2 from -5.2. By contrast, the construction sentiment index rose to -2.0 from -2.2 in February.

The employment expectations indicator declined to 96.4 from 97.8 due to downward adjustments in employment plans mainly in retail trade, but also in services and industry.

Further, the survey showed that managers' selling price expectations rose sharply in March and moved further beyond their long-term average.

"The Middle East war has clearly thrown the eurozone economy off track," ING economist Bert Colijn said.

Although relatively quick end to the conflict would limit the economic fallout of course, concerns about longer-lasting effects are clearly starting to affect the mood in Europe, the economist noted.