Economic confidence in the euro area decreased more than economists forecast in March, adding to signs that the 17-nation currency bloc’s recession continued into the first quarter.
An index of executive and consumer sentiment decreased to 90 from 91.1 in February, the European Commission in Brussels said today. Economists had forecast a drop to 90.5, according to the median of 30 estimates in a Bloomberg News survey.
“These are rather disappointing figures,” Carsten Brzeski, senior economist at ING Group in Brussels, said by telephone. “It looks like the crisis has returned in the minds of the entrepreneurs.”
The euro-zone economy has contracted for five consecutive quarters. That trend is forecast to continue in the first three months of this year before a return to growth in the second quarter, a separate Bloomberg survey shows. The European Central Bank sees the economy shrinking 0.5 percent in 2013.
The euro was trading at $1.2784 at 11:45 a.m. in Brussels, down 0.6 percent on the day. The Stoxx Europe 50 index was down 1.4 percent to 2605.27.
“We expect euro-zone economic activity to stagnate in the first and second quarters of 2013 before returning to modestly positive growth in the second half of 2013, and more visibly in 2014,” economists at UBS AG including Reinhard Cluse wrote in a note before today’s data were released. “Domestic demand is likely to remain a drag on growth in 2013, with positive impulses only from net exports.”
A gauge of sentiment among European manufacturers declined to minus 12.5 from minus 11.3 in February, today’s report showed. An indicator of services confidence fell to minus 6.7 from minus 5.3, while consumer sentiment improved to minus 23.5 from minus 23.6.