Business confidence in the 17-nation eurozone has fallen substantially in March, raising fears that the route to recovery will be tougher than expected. The decline has ended a four-month upward trend.
Economic sentiment in the eurozone dropped 1.1 points in March, the European Commission said Wednesday as it released its Economic Sentiment Indicator (ESI).
The ESI for March came in at 90 points - down from a reading of 91.1 points in February - ending four months of consecutive increases in the key barometer of business confidence.
The decline had been driven by decreases in all business sectors, the EU Commission said. Economists described the decline as worse than expected, partly attributing it to an inconclusive election in Italy last month and the chaotic bailout of eurozone member Cyprus.
The ESI barometer showed business sentiment had worsened in three of the five largest economies. The reading for France was down 1.7 points, while Germany and Spain suffered declines by 1.6 points and 0.9 points respectively. Surprisingly, Italy rose by 1.4 points in March.
Within the wider 27-member European Union, economic sentiment improved only in the United Kingdom - up 1.1 points - and in Poland where the ESI rose 1.7 points. The gains limited a generally downward ESI trend in the bloc.
However, hope for a recovery in the eurozone was provided by a stable consumption climate reflected in a slight increase of 0.1 points in March as people expect improving possibilities for employment.
uhe/dr (Reuters, dpa)