Eurozone Economic Confidence Falls In June

(RTTNews) - Ahead of Greece crisis escalating over the weekend, Eurozone economic confidence fell slightly in June on a mild deterioration of industrial and retailer sentiment.

The economic confidence index fell unexpectedly to 103.5 in June from 103.8 in May, survey data from the European Commission showed Monday. It was forecast to remain unchanged at 103.8.

Confidence was still at a level that should be supportive to growth, although it remains to be seen just how much it is dragged down by events in Greece, IHS Global Insight Economist Howard Archer, said.

There is clearly a very real risk that sentiment, particularly business sentiment, could now take a major downward lurch with potentially damaging implications for the Eurozone's economic recovery.

The industrial confidence index fell to -3.4 in June, while it was forecast to remain at -3. Lower confidence resulted from managers' more pessimistic views on expected production and the current level of overall order books, while their assessment of stocks of finished products improved slightly.

The indicator for retail trade fell to -1.1 from 1.5 in the previous month. The decrease in retail trade confidence reflected more negative views on all the three components of the indicator, namely managers' assessment of the present and expected business situation and of the adequacy of the volume of stocks.

The consumer confidence index came in at -5.6, in line with the flash estimate and unchanged from May. A marked improvement of the assessment of future unemployment was counterbalanced by more negative views on the future general economic situation and future savings.

Similarly, confidence among the service sector remained stable in June. The index held steady at 7.9. The stable reading signals managers' brighter views on demand expectations being offset by worsened views on the past business situation.

Another report from EU showed that the business confidence index fell to 0.14 in June from 0.28 in May. Managers' assessment of the adequacy of stocks of finished products improved, while their production expectations and their assessments of past production, overall and export order books all worsened.