Consumers still gloomy in Europe

09 January 2012

BRUSSELS: Consumer and business confidence continues to decline in Europe, reflecting the economic troubles facing much of the region.

The European Union's regular barometer of popular sentiment stood at –21.1 points in December 2011, compared with the score of –20.4 points registered during November.

"Confidence has been ebbing away for some time now and there's no reason to suppose economic confidence is going to turn up any time soon," Peter Dixon, an economist at Commerzbank, told Bloomberg.

"Depending on how deep the recession ends up being we could see further dramatic declines," he added. "People aren't spending and trade is drying up. It's a pretty dismal outlook."

Across both the industry and public panels, figures fell by five points in Poland, 4.6 points in Italy, 1.3 points in Spain and a more restricted 0.5 points in the UK.

France delivered a modest 0.1 increase on the same metric, standing at 0.8 points for the Netherlands and exactly one point in Germany, the only nation currently above its long-term average.

Expectations among manufacturers remained flat, while the services sector logged a contraction of 1.2 points in the EU. Financial services firms also witnessed a 2.5 point decrease, but retailers saw a 2.7 point improvement month on month.

Over the entire EU, the combined industry and popular index slipped from 92.8 points to precisely 92 points month on month.

This can be measured against a slide from 93.8 points to 93.3 points in the Eurozone.

Such ratings constituted the worst total for over a year, but still came in comfortably ahead of the 69.6 points posted in March 2009, the lowest returns on record.

"December's fall in Eurozone economic sentiment ... confirm that the Eurozone economy is in a very bad state," said Jennifer McKeown, European economist for Capital Economics.

"We expect a fall in GDP of about 1% this year and an even sharper decline in 2013."

Data sourced from Wall Street Journal/Bloomberg; additional content by Warc staff