Eurozone Economic Confidence August 2022

Sentiment in the euro zone fell to 97.6 in August from 98.9 in July. Thus, the index has moved below its long-term average of 100.

Declining sentiment in the industrial and services sectors. However, sentiment in construction and retail services improved slightly. Furthermore, the employment outlook has gained some marginal ground. In addition, consumer confidence strengthened in the month. Meanwhile, sales price expectations have eased across all sectors.

Regarding certain countries, sentiment fell in France, Germany, Italy and the Netherlands, while it rose in Spain.

Bert Cullen, chief economist at ING commented:

“The highlight of the survey is that selling price expectations by both manufacturers and service providers have fallen for four consecutive months now. This is generally related to core inflation, and this begs the question of whether peak inflation is really approaching. The question here is how the jump will play out. The following in gas and electricity prices is putting pressure on margins, which could put further pressure on core inflation in the coming months. But a rapidly slowing economy is clearly dampening inflation prospects as well.”

Members of the FocusEconomics Consensus forecast committee expect fixed investment to expand 3.6% in 2022, unchanged from last month’s forecast. For 2023, committee members see fixed investment increase by 3.3%. Members of the FocusEconomics Consensus forecast committee expect private consumption to expand 4.2% in 2022, which is 1.1 percentage points lower than last month’s forecast. In 2023, the committee expects private consumption to rise by 2.4%.

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