In July, confidence among businesses and consumers in the eurozone continued to decline, particularly in the industrial sector. According to data from the European Commission, the bloc’s economic sentiment indicator, which measures both business and consumer confidence, fell to 94.5 from 95.3 in June. This reading was below the 95.0 that economists had expected, indicating that the region’s high interest rates are putting pressure on economic activity.
Industrial confidence took a significant hit, dropping to minus 9.4, well below economists’ expectations. Managers expressed a gloomy outlook on production and current order books, contributing to this decline. However, there was positive news on the consumer confidence front. Respondents showed improvement in their personal financial situations and had a more optimistic view of their country’s general economic outlook. This improvement aligned with expectations after last year’s lows.
Among the eurozone’s largest economies, there was little variation in sentiment changes. Germany, France, and Spain experienced a similar shift in overall economic sentiment, while Italy’s level remained mostly unchanged. The Netherlands, however, bucked the trend and saw a slight improvement in sentiment.
Overall, these findings underscore the challenges faced by the eurozone, with declining confidence exerting pressure on its economic landscape.