Euro area economic sentiment index plummets in April

Source: Xinhua | 2020-04-30

A key indicator for economic sentiment in both the euro area and the European Union (EU) plummeted in April, marking the strongest monthly decline on record, according to official data released on Wednesday.

The Economic Sentiment Indicator (ESI) in the euro area fell by 27.2 points from the previous month to 67.0 points in April, while the ESI for the EU sank 28.8 points to 65.8 points, the European Commission said in a statement.

The ESI reading has a long-term average of 100, and the current reading is very close to the lowest levels registered during the recession in March 2009, it said.

The collapse in the ESI in the euro area resulted from an exceptionally strong fall in confidence among consumers and in all the business sectors, and the crash was particularly marked in services and retail trade, said the statement.

Among the largest euro area economies, the Netherlands registered the steepest fall of 32.6 points in the ESI, followed by a fall of 26 points in Spain and 19.9 points in Germany.

However, the statement noted that no data could be collected in Italy due to strict lockdown measures and the response rate to the survey was lower than usual in many countries, which could lead to less accurate and comparable results across countries than usual.

Specifically, the euro area service sector saw an exceptional decrease of 32.7 points in the confidence index, driven by record-breaking deteriorations in expected demand, while the euro area manufacturing industry confidence fell by 19.2 points, resulting mainly from crashing production expectations, but remained above the record low of March 2009.

Consumer confidence was down by 11.1 points, reflecting the households' tumbling expectations concerning the general economic situation and also their own financial situation, the report said.

The Employment Expectations Indicator also nosedived to its lowest levels on record, with the April reading down by 30.1 points to 63.7 in the euro area and by 31.2 points to 63.3 in the EU.