Eurozone: Economic sentiment drops in May
May 30, 2012
The Economic Sentiment Indicator (ESI) published by the European Commission fell to 90.6 points in May, down from a revised 92.9 points in April (previously reported: 92.8 points). The reading marked a second consecutive drop in the index and came in below market expectations, which had sentiment easing to 92.0 points. Currently, the index sits at its lowest level since October 2009 and remains well below its long-term average of 100 points, suggesting deteriorating prospects for the Eurozone economy going forward. The decline was driven by worse results in four out of the five main categories, with the largest drop experienced in the retail sector, followed by the construction sector. In contrast, consumer sentiment improved compared to the previous month. At a country level, the largest declines were seen in Cyprus (-5.2 points) and Italy (-4.3 points). Sentiment also deteriorated in all the remaining major economies in the region, with France marking the largest drop (-1.5 points) followed by Germany (-1.4 points), which, nevertheless, still boasts the highest confidence level in the region, along with Estonia (101.9 points). Finally, sentiment dropped by 1.0 point in Spain.
Author: Armando Ciccarelli, Head of Data Solutions