Eurozone economic confidence weakened in February largely due to the significant drop in sentiment among services providers, survey data from the European Commission showed Thursday.
The economic sentiment index fell unexpectedly to 98.3 in February from 99.3 in the prior month. The score was forecast to rise to 99.8.
Services confidence weakened to a four-month low in February. The corresponding index slid to 5.0 from 6.8 in January. The reading was expected to climb to 7.5.
The industrial confidence indicator declined moderately to -7.1 from -6.8 in the prior month, while it was forecast to improve to -6.1.
Meanwhile, consumer sentiment improved to the highest since November 2024. The index stood at -12.2, unchanged from the flash estimate, and up from -12.4 in January.
Confidence among retailers also strengthened in February. The corresponding index climbed to -4.5 from -5.7. This was the highest since December 2024.
On the other hand, sentiment among contractors fell to a four-month low. The index dropped to -2.1 from -1.3.
Among the largest eurozone economies, the ESI dropped most significantly in France, followed by Italy. Meanwhile, confidence remained broadly stable in Spain and Germany.
The euro area employment expectations indicator declined to 97.6 from 98.2 in the previous month, the survey showed.
ING economist Bert Colijn said the economic confidence index was far more upbeat than other surveys in January, which makes the drop in February less of a concern.
The economist expects economic sentiment to remain upbeat, reflecting stronger expected activity over the year in line with a modest acceleration in economic growth.
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