Eurozone Sees Decline in Economic Sentiment

(MENAFN) Economic confidence across the euro area and the broader European Union edged lower in February, new data showed Thursday, as a sharp deterioration in the services sector dragged sentiment below what analysts had anticipated.

The European Commission reported that its economic sentiment indicator fell by 1 point on a monthly basis to 98.3 — missing market expectations and signaling growing unease among businesses operating in the bloc's dominant services industry. Construction confidence also declined, though to a lesser degree.

The reading applies to the EA21 — the 21 EU member states that share the euro as their common currency — and adds to a cautious economic picture heading into the spring.

Consumer sentiment, however, offered a marginally brighter counterpoint. The Eurozone Consumer Confidence Index inched upward from minus 12.4 in January to minus 12.2 in February, while the broader EU measure improved slightly from minus 11.9 to minus 11.7 over the same period. Though both figures remain firmly in negative territory, the modest uptick suggests that households are fractionally less pessimistic about the general economic outlook than they were a month ago.

The divergence between weakening business sentiment and a slight lift in consumer confidence complicates the near-term picture for policymakers in Brussels and at the European Central Bank, who continue to monitor demand conditions closely as the region navigates sluggish growth and persistent structural pressures.

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