September — MNI analysts survey — August Revised
lowest median highest from
————————————————————————
Econ Sentiment 85.0 85.0 85.7 87.0 86.1 —
Industry -16.1 -17.0 -15.0 -15.0 -15.4 -15.3
Services -12.0 -11.0 -10.3 -9.5 -10.8 —
Consumers -25.9 na na na -24.6 —
Retail -18.6 na na na -17.2 -17.3
Construction -31.9 na na na -33.1 —
————————————————————————
Business Climate: -1.34 na na na -1.18 -1.21
FRANKFURT (MNI) – Economic sentiment in the Eurozone eroded faster
than expected in September to its lowest level in just over three years,
with only the construction sector showing any improvement, the European
Commission reported Thursday.
As a result, the Commission’s economic sentiment indicator shed 1.1
points to a 37-month low of 85.0, matching the most pessimistic
forecasts and dropping 15 points below the long-run average.
The latest sentiment reading adds to mounting evidence that the
Eurozone likely fell back into a technical recession in 3Q.
September’s PMI showed private sector activity dropping to a
39-month low, and was “consistent with GDP contracting by 0.6% in the
third quarter,” Markit chief economist Chris Williamson said.
Among the larger Eurozone states, only Spain (+1.3 points) saw any
improvement, while sentiment fell in France (-1.6), the Netherlands
(-1.2), Germany (-1.1) and Italy (-0.1).
Industry morale fell for the seventh consecutive month in
September, surpassing all but the most pessimistic forecasts to hit a
34-month low.
Respondents continued to revise downwards the outlook for
production, as order books thinned further. With recent production
trends at three year lows, a growing proportion of manufacturers
expected to cut staff in the near term.
The Commission’s separate business climate indicator shed gains
from last month, slipping to -1.34 in September, its worst reading since
October 2009, on the back of worsening production expectations, order
books and production trends. Conversely, managers were slightly more
positive regarding how adequate they believed their inventory levels to
be.
In the services sector, morale overshot all forecasts to reach
-12.0, its worst result since July 2009, on bleaker current conditions
and worsening demand prospects. Employment expectations also fell
further.
Financial service morale hit a three-month low in September. While
demand prospects continued to improve, it was not enough to prevent a
further decline in employment expectations, which fell for the third
consecutive month.
According to the most recent survey by the Centre for European
Economic Research (ZEW), investors’ outlook for the Eurozone economy
brightened in September. Nevertheless, with the indicator still below
zero, the majority of respondents remain convinced that developments
will worsen in the coming months.
Today’s Commission report confirmed consumer sentiment at -25.9 in
September, as households’ grew more pessimistic regarding both their
personal financial situations and future economic developments.
Employment fears also increased, while inflation fears hit a
nine-month high amid rising selling price expectations across all major
sectors.
In retailing, sentiment declined to its lowest level since spring
2009. Respondents reported a worsening current business situation and
expected the outlook to darken further. Not surprisingly, their
employment expectations and their intentions of placing orders continued
to decrease.
Bucking the trend, construction companies were mildly less downbeat
in September, with activity trends improving and employment expectations
up. Order books continued to show an erosion of demand, however.
— Frankfurt bureau: +49-69-720 142; email: frankfurt@mni-news.com
[TOPICS: M$XDS$,M$X$$$,MT$$$$,MTABLE]
