Ireland bucks gloom as Europe's optimism hits a nine-month low
Economic confidence in the Eurozone has tumbled to its lowest level in nine months.
The decline was even steeper than economists had been expecting.
The latest report contrasts with recent findings in Ireland which showed both business and consumer confidence to be increasing.
Confidence among Irish businesses is at a nine-year high, according to a survey by KBC Bank Ireland and Chartered Accountants Ireland, released last month, while the consumer sentiment index from KBC and the ESRI also increased in the first month of the year.
But the confidence index published by the European Commission yesterday dropped significantly in both the Eurozone and the European Union as a whole, marking its second consecutive decline this year.
The slump was blamed on worsening confidence among consumers, industry and in services. In the Eurozone the deterioration was seen in all areas except construction.
The Economic Sentiment Index fell back in almost all of the big economies, including the Netherlands, Italy and to a lesser extent in Germany, France and Spain.
The Commission said economic sentiment in the 19 countries sharing the euro fell to 103.8 in February from a slightly upwardly revised 105.1 in January
Brussels' business climate indicator, which points to the phase of the business cycle, also fell sharply to 0.07 from 0.29 in January. Economists had expected a slight decline to 0.28.
Sentiment in industry fell to -4.4 from -3.1, and declined to 10.6 from 11.5 in the services sector, which account for more than two-thirds of the single currency area's GDP. The consumers' confidence index also dropped to -8.8 from -6.3 in January, down from -5.7 in December. Sentiment in retail trade went also down to 1.6 from 2.7 in January.
The financial services sector reported a deep drop in confidence to 7.5 in February from 17.7 in January.
Manufacturers were the only sector showing more confidence with their general index slightly improving to -17.5 in February from -19.0 in January, although it remained firmly in negative territory. However, manufacturers were less upbeat about the possibility of raising prices in the future, with the selling price expectations index down at -5.5 in February from -4.1 in January and -3.2 in December.
Consumers instead expected prices to grow more quickly in the next 12 months -- their inflation expectations index increased to 3.7 in February after a sharp drop in January when it was at 2.3.
Meanwhile, Eurozone inflation looks to be cooling more than expected, with prices in three of the region's four largest economies missing estimates and strengthening the case for an expansion of the European Central Bank's monetary stimulus in March.
Consumer prices slid in Germany, France and Spain in the year to February, figures showed on Friday. In Germany, the European Union-harmonised rate of inflation slowed to minus 0.2pc compared with a prediction for no change in a Bloomberg survey.
The rate dropped an annual 0.1pc in France, compared with a forecast of a 0.1pc rise.
Spanish prices slid 0.9pc, compared with an estimated decline of 0.6pc. (Additional reporting agencies)