–In 5th Graph From Bottom, Consumer Indicator Was Revised To -21.1
Dec — MNI analysts survey — Nov Revised from
lowest median highest
———————————————————————
Econ Sentiment 93.3 92.5 93.0 93.7 93.8 93.7
Industry -7.1 -8.0 -7.7 -6.9 -7.1 -7.3
Services -2.1 -2.5 -2.0 -1.0 -1.6 -1.7
Consumers -21.1 na na na -20.4 —
Retail -11.7 na na na -11.1 -11.0
Construction -25.2 na na na -25.0 -24.8
———————————————————————
Business Climate: -0.31 -0.6 -0.5 -0.4 -0.42 -0.44
PARIS (MNI) – Economic morale in the Eurozone eroded slightly less
than generally expected in December, as industry sentiment stabilized
and the deterioration in most other sectors slowed somewhat, the
European Commission said Friday.
After a 14.2-point slide since February, the Commission’s sentiment
index slipped another half point in December to a 25-month low of 93.3.
Alongside the deterioration in other leading indicators, this
confirms the loss of economic momentum in 4Q. With headwinds mounting
from monetary tightening in emerging markets and fiscal tightening
throughout the Eurozone, activity is likely to stagnate at best for an
extended period.
Among the largest economies, Italy sustained the biggest decline
(-4.6 points), followed by Spain (-1.3). Sentiment was broadly unchanged
in France (+0.1), while it improved in the Netherlands (+0.8) and
Germany (+1.0). Only in Germany is the index still above average.
Industry morale held up better than generally expected, as the
decline of the past three months was interrupted. Firms’ assessment of
export orders and near-term production prospects recovered, offsetting a
further decline in overall orders and finished goods stocks.
Contrary to expectations, the Commission’s separate Business
Climate Indicator actually rose somewhat in December, regaining 0.11
point after a 0.23 drop in November. Producers were less pessimistic
about recent and expected output and export order books, but not about
total order books.
While the Eurozone factory PMI for December was less weak than in
November, it still showed output declining for the fifth month in a row
(47.1) and total orders falling rapidly (43.5).
Sentiment in the services, however, eroded further as expected,
slipping half a point to a 23-month low. Providers were more
disappointed with recent demand and activity but somewhat less downbeat
about future prospects.
Morale in the financial services, which is not seasonally adjusted,
fell sharply in December, retracing all of the rebound in November. A
modest recovery in near-term expectations was more than offset by the
deterioration in recent activity.
Like the industry PMI, the services PMI improved somewhat in
December, but activity (48.8) and orders (47.1) continued to contract
for the fourth consecutive month.
The Commission’s initial “flash” estimate for consumer sentiment
was revised up marginally from -21.2 to -21.1, giving a 0.7-point
monthly decline to a 28-month low, well below the long-term average.
While households were somewhat less worried about future economic
trends, they feared the labor market would weaken more and expected the
deterioration in their personal financial situation to continue. Future
buying propensity remained well below average and households said they
were cutting back more on major purchases at present.
The erosion in retail sentiment to the lowest level in 26 months
reflected mainly weaker expectations for future turnover and a further
rise in inventories. Recent business had stabilized after five months of
erosion, they said.
In construction, morale was slightly weaker than in November and
well below average. Builders said recent activity had recovered but they
were less satisfied with order book levels.
Selling-price expectations weakened in retailing but improved in
industry, the services and construction, remaining above average
everywhere except for construction.
Apart from construction, hiring prospects were weaker across the
board, especially in the financial services.
–Paris newsroom +331 4271 5540; email: ssandelius@marketnews.com
[TOPICS: M$XDS$,M$X$$$,MT$$$$]