Consumer gloom grows in Europe

29 June 2012

BRUSSELS: Consumer confidence is declining in the European Union, as economic worries in many markets weigh on shoppers.

The European Commission's barometer of popular sentiment in the EU reached –19.7 points in June versus –19.4 points in May. These figures stood at –19.8 points and –19.3 points for the eurozone.

"The crisis continues to dominate everything," Gerd Hassel, an economist at BHF Bank AG, told Bloomberg. "I fear that confidence will continue to decline over the coming months."

Greece generated the worst overall score on –70.4 points, although this improved on the –75.8 points posted in May. Portugal, with –49.1 points, and Hungary, with –48.3 points, came next on this metric.

Sweden recorded the best returns on +9.7 points, beating Denmark on 6.5 points and Finland on +6.1 points. Germany was in fourth place here, but saw a month-on-month slide from +0.4 points to -1.3 points.

Among the area's other major markets, France registered –17.9 points, Italy yielded –41.5 points, Spain was on –25.1 points and the UK delivered –21.2 points.

"The sustained fiscal austerity and 'muddling through' approach to the crisis is clearly taking its toll on economic confidence across the region," said Martin van Vliet, an economist at ING Bank.

"As such, today's figures are a further wake-up call to eurozone leaders that … the crisis … needs a short-term solution addressing the lack of growth and dislocation in eurozone sovereign debt markets."

When assessing their potential household financial circumstances in the next 12 months, respondents in the EU provided an average rating of –9.5 points, bettering the –10.4 points logged in May.

Similarly, the eurozone attained a total of –10.0 points exactly in June, a moderation from –10.8 points the previous month.

By contrast, when asked to appraise the wider economic situation during this period, both of these readings fell by 1.9 points, to –26.2 points across the EU, and –25.6 points in the single currency area.

In discussing the likelihood of making major purchases in the coming year, the EU-wide score came in at –23.5 points and the eurozone equivalent hit –22.5 points, each improving by around a point on May, but still some five points behind the long-term average.

Data sourced from European Commission/Bloomberg; additional content by Warc staff