Economic sentiment collapses at sharpest pace on record in April
Sentiment in the Eurozone tumbled at the sharpest pace in the survey’s history in April due to measures adopted to contain the spread of coronavirus, plunging to 67.0 points from March’s 94.2 points. Consequently, sentiment in the Eurozone plummeted further below its long-run average of 100 points, and logged the second-lowest reading ever after March 2009.
April’s dive came on the back of plummeting confidence among both businesses and consumers. The services sector and retail trade borne the brunt of the impact from the lockdown measures. Moreover, sentiment in industry and among consumers declined significantly, but to a lesser extent. In the survey arises that confidence in the construction sector was the less affected, although it also fell markedly. Meanwhile, employment expectations cratered to their lowest level on record, due to strong a dive in hiring plans across all sectors.
Among the largest economies of the Euro Area, sentiment nosedived in the Netherlands and Spain, while it fell strongly but to a lesser extent in Germany and France. Meanwhile, data could not be collected in Italy due to confinement measures.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“The question now is how quickly we can expect sentiment to recover as economies are gradually reopened. As the reopening of the economy will be phased over time, May is likely to only bring small improvements to the current situation although some could already bring quite some relief to the economy.”