Brussels: Black clouds are still hovering over Europe and Financial Recovery looks still under the hurricane as the Economic Sentiment Indicator (ESI) decreased in both the euro area and the EU in March 2013, putting on hold the recovery that had started in November 2012. Domestic tourism is almost at nosedive while overall tourism situation aldo does look positive.
The European Commission released financial indicators on March 27, indicating Sentiment (Financial report) declined by 1.1 points in the euro area (to 90.0) and by 0.6 points in the EU (to 91.4). Economic sentiment worsened in three out of the five largest euro area economies, i.e. France (-1.7), Germany (-1.6) and Spain (-0.9), while it remained broadly stable in the Netherlands (-0.3) and improved in Italy (+1.4).
In the euro area, the ESI’s decline was driven by decreases in all business sectors, while consumer confidence remained broadly stable, Sentiment claims. The decrease in industry confidence (-1.2) resulted from a much more negative assessment of the current level of overall order books and a slightly worsened assessment of stocks of finished products, while managers’ production expectations remained virtually unchanged. The past production and the current level of export order books, which are not included in the confidence indicator, were also assessed much more unfavourably. Services confidence interrupted the upward trend observed since October 2012, dropping by 1.4 percentage points.
The decrease was the result of a marked worsening in managers’ demand expectations and – to a lesser extent – their assessment of past demand, while their views on the past business situation remained virtually unchanged. Consumer confidence remained broadly stable (+0.1). Consumers were less pessimistic regarding their unemployment expectations, while slightly more pessimistic regarding their savings expectations over the next 12 months. Consumers’ views on the future general economic situation and the future financial situation of their households were broadly unchanged. Retail trade confidence decreased (-1.5), driven by a worsened assessment of all three components: the present business situation, business expectations and (to a lesser extent) the volume of stocks. Also construction confidence decreased somewhat (-0.6), based on a worsened assessment of order books and employment expectations. Financial services confidence (not included in the ESI) fell by 1.1 points. While demand expectations improved considerably, the past business situation and past demand were assessed clearly more negatively.
