The Eurozone’s Economic Sentiment Indicator climbed to 96.3 in February 2025, marking a five-month high, up from a revised 95.3 in January and slightly exceeding forecasts of 96.
Eurozone economic sentiment at five-month high
Optimism improved among industrial goods producers (-11.4 vs -12.7 in January) due to better production expectations, more favorable assessments of current order books, and higher stocks of finished products. Consumer sentiment also showed a modest improvement (-13.6 vs -14.2). However, confidence weakened in the services sector (6.2 vs 6.7) amid declining demand expectations, while sentiment among retailers remained unchanged (-5.3 vs -5.3).
Consumer confidence improved
Consumer confidence in the Euro Area rose by 0.6 points to -13.6 in February, reaching a four-month high and aligning with preliminary estimates. Across the broader European Union, sentiment also improved, increasing by 0.4 points to -12.9, as consumers expressed reduced pessimism about their country’s economic outlook and showed greater willingness to make major purchases. However, their perception of both their past and expected household financial situation remained largely unchanged.
Services sentiment softened
Meanwhile, services sector sentiment in the Eurozone softened, with the indicator falling to 6.2 in February from a downwardly revised 6.7 in January, missing market expectations of 6.8. The decline was driven by weaker client demand expectations for the next three months (8.8 vs 9.3), the lowest level in at least a year, amid heightened uncertainty (13.2 vs 11.9), likely influenced by repeated tariff threats from US President Trump. Additionally, expectations for selling prices (12.7 vs 15.7) and employment prospects over the next three months (0.6 vs 2.7) both declined, with the latter hitting a one-year low. On the other hand, demand over the past three months showed a slight improvement (8.8 vs 8.6), though overall business performance weakened (1.1 vs 2.1).
