The economic confidence of businesses and consumers in the European Union and the eurozone deepens its fall in June and has already accumulated four months of falls, with expectations of retail sales prices and consumers at record highs. Companies anticipate a reduction in employment.
The economic sentiment indicator (ESI) made public today by the European Commission fell 1.7 points in June in the EU (down to 102.5) and in the eurozone it fell one point (down to 104). The expectations of companies and citizens of the community bloc have not stopped falling since the war in Ukraine began on February 24, the last month it rose.
In the comparison by country, economic expectations decreased in the six major economies of the communicatio club, with the Netherlands leading the table (fall of 3.6%), followed by Spain and Germany (-1.9%), Poland (- 1.5%) and France and Italy (-1%).
The confidence indicator in June decreased mainly due to the lower expectations of construction companies and consumers and, to a lesser extent, retail companies, while the reduction was less in the services sector and remained stable in industry.
On the other hand, the indicator on employment expectations (EEI) also fell to 110.6 points for the whole of the Twenty-seven (1.6 points less) and 110.9 in the euro zone (1.7 points less ).
This fall is mainly explained by the “significant deterioration” of employment plans in construction, which fell to their worst level since April 2021. Added to this is also the pessimism of industrial and retail companies, which foresee a downsizing of its workforce over the next three months.
Sales price expectations reached a record level in retail and remained stable in the services sector, while in industry and construction they decreased for the second consecutive month.
With regard to consumer expectations regarding prices, and despite their decrease for the third consecutive month, the perception regarding the evolution of the last twelve months continued to increase and reached, once again, a record level.
The economic uncertainty indicator (EUI) grew 1.3 points in June to stand at 23.9 points. The “substantial increase” in uncertainty among consumers explains this rise, although increases were also seen in industry and, together, they outweighed the decline in retail, services and construction.