Eurozone: Economic sentiment edges down from over 17-year high in January

Economic sentiment in the Eurozone remained buoyant in January, although waning slightly from December’s reading. According to the European Commission (EC), the economic sentiment index (ESI) decreased from 116.0 points in December to 114.7 points in January. Despite the fall, sentiment in the Eurozone remains at one of the highest readings in nearly two decades sustained by a booming economic recovery.

January’s fall was driven by a decline in confidence in the services and retail trade sectors. Meanwhile, sentiment in the industrial sector was unchanged, while consumer confidence strengthened in January. Employment plans improved notably in the services and retail trade sectors, but fell slightly from the over 30-year high recorded in the industrial sector in December.

At a country level, economic sentiment eased notably in Austria, Malta and Slovakia. Major-players France and Italy also saw weaker confidence, while Germany and Spain recorded higher sentiment.

Eurozone Private Consumption Forecast

FocusEconomics Consensus Forecast panelists see private consumption growing 1.8% in 2018, which is unchanged from last month’s projection. For 2019, panelists see consumption expanding 1.6%. Panelists expect investment to grow 4.0% in 2018, which is up 0.1 percentage points from last month’s forecast. In 2019, panelists see investment increasing 3.3%.