Investing.com — The Economic Confidence (EC) survey suggests a stagnant euro-zone GDP in the fourth quarter, along with continued inflationary pressures, according to Capital Economics’ survey results.
The survey’s findings align with previous indicators, including the Purchasing Managers Index (PMI), which also signaled no significant change in the final quarter of the year.
The survey’s Economic Sentiment Indicator (ESI) fell from a revised 95.6 in November to 93.7 in December, a drop that was steeper than both consensus and our own forecasts, which predicted 95.6 and 95.3 respectively. This decline is in line with the stagnation of the GDP in the fourth quarter.
The survey also indicates a loosening labor market, with the employment expectations index dropping from 98.9 to 97.3. This decrease is consistent with the further weakening of employment growth from 0.2% quarter-on-quarter in the third quarter to just above zero.
Inflationary pressures remain persistent according to the survey data. Selling price expectations for firms in the industrial and construction sectors have risen slightly. The services selling price expectations index also increased, reaching a 10-month high and remaining above pre-Covid norms.
Despite the economic activity’s weakness, these findings from the survey may increase concerns among ECB policymakers about the strength of domestic price pressures.
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