Eurozone economic sentiment falls despite industry pick-up

Brussels-Eurozone economic conditions were slightly lower than expected in June as consumers and retailers were more sluggish, but the spirit of the industrial and services sectors improved.

According to a monthly survey by the European Commission, the economic situation in the 19 euro-sharing countries fell from 105.0 in May to 104.0 in June. Economists surveyed by Reuters expected an average of 103.0 in June.

Industry sentiment improved from 6.5 to 7.4 points in May, and services, the largest sector of the economy, improved from 14.1 to 14.8 in May. Both economists expected to decline.

Manufacturers were more bullish on future production and purchase orders, but less bullish on employment, with greater overall uncertainty. The service sector has been brighter about the business for the past three months, but not optimistic in the future.

Consumer confidence dropped from -21.2 to -23.6, and retail sentiment dropped from -4.2 to -5.1. Households were more pessimistic about the economy of the past and next year, as well as the outlook for large-scale purchases and savings.

The five major economies in the euro area, especially the Netherlands, were the most prominently depressed.

Consumer inflation expectations, which reached record highs in March, continued to decline, dropping from 45.5 in May to 42.6 in June. The sales price forecast was also low among manufacturers at 50.4, down from the record high of 59.5 in April.