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Sat, Feb 11 2012
Eurozone business climate worsens to new low
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The Business Climate Indicator (BCI) for the euro area fell significantly in February to yet another low, reaching its lowest point since January 1985.
The European Commission said in a statement on February 26 2009 that this confirms the expectation that the outcome of the year-on-year industrial production growth for January will be markedly negative, following on from the sharp fall already recorded in December 2008.
It also suggests that annual industrial production growth will remain clearly negative in February 2009.
The drop in the BCI reflects a general deterioration in most of its underlying components.
"Managers' assessment of the current overall order books and export order books is increasingly negative."
Managers also reported a sharp fall in the production trend observed in recent months, while the stocks of finished goods stabilised - though at a very high level - and production expectations remained broadly stable.
In February, the Economic Sentiment Indicator (ESI) for the EU and the euro continued to decline.
It fell by 2.2 points in the EU, a much smaller fall than that recorded in January, and by 1.8 points in the euro area, which in contrast was similar to the decline observed in January.
The ESIs now stand at 61.0 and 65.4, respectively - the lowest levels since the current series of the indicator was launched in January 1985.
"The fall in the ESI for both the EU and the euro area can be attributed to a general decline in confidence in all sectors, except for the retail trade which slightly improved - by one point - in both areas," the EC said.
Industry (-4 points in the EU and -3 in the euro area) was the sector which saw the biggest decline.
The construction confidence indicator dropped by two points in both the EU and the euro area. Both service and consumer sentiment dropped by one point in the EU and by one and two points, respectively, in the euro area.
Overall, most EU member states recorded a fall in confidence.
Among the large member states, confidence in Poland fell the most (-8.2 points), followed by the Netherlands (-6.7), the UK (-3.8) and Spain (-2.2). The confidence indicator fell less significantly in Germany (-1.2), France (-0.6) and Italy (-0.3).
Employment expectations fell sharply in both industry and services. Consistent with this, consumers' unemployment expectations increased significantly. After a decreasing trend observed since summer 2008, managers' selling-price expectations as well as consumers' price expectations stabilised at very low levels.
The financial services confidence indicator - not included in the ESI - remained broadly unchanged in the EU and improved in the euro area (+4), although not enough to compensate for the significant drop registered in January in both areas.
"These results reflect a significant decrease in managers' assessments of both the business situation and the demand for their services over the past three months, whereas their expectation of demand over the next three months improved markedly," the EC said.
The European Commission said in a statement on February 26 2009 that this confirms the expectation that the outcome of the year-on-year industrial production growth for January will be markedly negative, following on from the sharp fall already recorded in December 2008.
It also suggests that annual industrial production growth will remain clearly negative in February 2009.
The drop in the BCI reflects a general deterioration in most of its underlying components.
"Managers' assessment of the current overall order books and export order books is increasingly negative."
Managers also reported a sharp fall in the production trend observed in recent months, while the stocks of finished goods stabilised - though at a very high level - and production expectations remained broadly stable.
In February, the Economic Sentiment Indicator (ESI) for the EU and the euro continued to decline.
It fell by 2.2 points in the EU, a much smaller fall than that recorded in January, and by 1.8 points in the euro area, which in contrast was similar to the decline observed in January.
The ESIs now stand at 61.0 and 65.4, respectively - the lowest levels since the current series of the indicator was launched in January 1985.
"The fall in the ESI for both the EU and the euro area can be attributed to a general decline in confidence in all sectors, except for the retail trade which slightly improved - by one point - in both areas," the EC said.
Industry (-4 points in the EU and -3 in the euro area) was the sector which saw the biggest decline.
The construction confidence indicator dropped by two points in both the EU and the euro area. Both service and consumer sentiment dropped by one point in the EU and by one and two points, respectively, in the euro area.
Overall, most EU member states recorded a fall in confidence.
Among the large member states, confidence in Poland fell the most (-8.2 points), followed by the Netherlands (-6.7), the UK (-3.8) and Spain (-2.2). The confidence indicator fell less significantly in Germany (-1.2), France (-0.6) and Italy (-0.3).
Employment expectations fell sharply in both industry and services. Consistent with this, consumers' unemployment expectations increased significantly. After a decreasing trend observed since summer 2008, managers' selling-price expectations as well as consumers' price expectations stabilised at very low levels.
The financial services confidence indicator - not included in the ESI - remained broadly unchanged in the EU and improved in the euro area (+4), although not enough to compensate for the significant drop registered in January in both areas.
"These results reflect a significant decrease in managers' assessments of both the business situation and the demand for their services over the past three months, whereas their expectation of demand over the next three months improved markedly," the EC said.
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