The economic confidence in the euro zone sank to a two-year low in February, while business climate indicator also dropped, the European Commission said on Friday.
The economic sentiment indicator in the euro zone, which has been on a downward path since mid-2007, stood at 100.1 in February, down by 1.6 points from that in January. It was the lowest level since January 2006.
The monthly indicator, based on business and consumer surveys, also declined by 3.1 points to 100.2 in the European Union (EU), according to revised figures.
The surveys are conducted in different sectors of the economy, namely industry, services, construction and retail trade as well as consumers.
In both the euro zone and the EU, the decrease in the sentiment indicator was mainly due to a significant drop in confidence in the services sector and, to a lesser extent, lower confidence in the manufacturing and construction sectors.
Confidence among consumers decreased slightly in the EU, while it remained stable in the euro area. In both areas, confidence improved in the retail trade sector.
Following continuous worsening, the commission said the indicator now stood at its long-term average in both areas.
At the individual country level, the picture was fairly mixed, with a majority of the countries reporting decreases in sentiment in February. Among the large EU member states, confidence improved slightly in Germany, while it dropped by 9.0 points and 1.8 points in Britain and France.
Meanwhile, the business climate indicator (BCI) for the euro zone also continued to decline in February, the European Commission said in a separate report released Friday.
The decrease in the BCI was mainly due to a worsening of industry managers' production expectations for the months ahead. Managers' assessments of their total order books and export order books also declined slightly, while their views of the stocks of finished products and production trend observed in recent months remained unchanged.
The commission said the indicator was still at a fairly high level, which suggested steady economic activity in the industry sector in the first months of this year, despite the deceleration in industrial production growth registered at the end of 2007.
Source: Xinhua
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