Highlights (If You Choose to Call Them That) from Europe’s Business & Consumer Surveys

European consumer survey data released earlier today showed a (worse than expected) third consecutive monthly decline after rising only twice so far this year (in April and May). The overall trend since early in 2015 has been down, though confidence has not plummeted quite as quickly as it did after reaching previous highs just before the financial crisis.

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The business climate indicator, which looked fairly resilient in July (i.e. just after Brexit), fell more than in any month since August 2011 due to “assessments of past production, the level of overall and export order books [that] deteriorated markedly”.

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Overall economic sentiment (ESI) deteriorated further in August as well, as confidence weakened in all business sectors except construction (where improved employment expectations overshadowed a decline in confidence about order books).

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Industrial confidence experienced the largest one-month decline since 2012 as a result of a sharp decline in the assessment of overall order books.

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The retail trade component of the ESI managed to fall even more than industrial confidence, declining nearly three points as a result of managers’ increasing pessimism with respect to both the present and expected business situation.

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From a geographic perspective, the ESI (medium blue line in below charts) fell in four of the five largest European economies: the Netherlands, Italy, Spain, and Germany. France proved to be a notable exception.

Netherlands

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Italy

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Spain

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Germany

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France

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In the U.K., the construction confidence component (grey line, below) of the ESI fell more than 16 points but all other components rose compared to their moderate declines last month.

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