Eurozone Economic Sentiment January 2019

Eurozone

Eurozone: Economic sentiment falls to over two-year low in January

January 30, 2019

Economic sentiment in the Eurozone continued to drop in January, starting 2019 on a poor note. According to the European Commission (EC), the economic sentiment index (ESI) came in at 106.2 points, down from the revised 107.4 points in December (previously reported: 107.3 points) and the worst result since November 2016. January’s reading undershot market expectations of a softer fall to 106.8. Nonetheless, sentiment in the Eurozone remains elevated above the long-term average.

January’s downturn was driven by lower confidence in the industrial, services and retail trade sectors. In contrast, consumers became more upbeat at the start of the year along with the construction sector. Employment plans were mixed across sectors: worsening in the industrial and services sectors but improving elsewhere.

Economic sentiment decreased in most member countries, including major-players Germany and Italy. Notably, data for Ireland was included for the first time in the European aggregates by the European Commission in January 2019, leading to revised historical data.

FocusEconomics Consensus Forecast panelists see private consumption growing 1.5% in 2019, which is unchanged from last month’s projection. For 2020, panelists see consumption expanding 1.5%. Panelists expect investment to grow 2.8% in 2019, which is unchanged from last month’s forecast. In 2020, panelists see investment increasing 2.4%.


Author: Angela Bouzanis, Lead Economist

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Eurozone Economic Sentiment Chart


Euro Economic Sentiment January 2019

Note: The Economic Sentiment Indicator (ESI) is based on surveys addressed to the manufacturing, services, retail trade and construction sectors, as well as to consumers. Values above 100 indicate an above-average economic sentiment, whereas values below 100 indicate a below-average position.
Source: European Commission


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