4 - 10 April 2001

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Euro-zone in upbeat mood

Euro-zone consumers have not been infected by the drop in confidence in the US, according to a European Commission survey.

The Commission's consumer confidence index was unchanged at minus 2 in March.

Though this implies that more people expect conditions to worsen than get better, after allowing for the customary gloom of euro-zone consumers it remains above the historical average.

The absence of any sense of panic among euro-zone consumers contrasts with the rapid deterioration in US consumers' sense of the future. US confidence has recovered slightly since earlier in the year when news of economic slowdown and job cuts hit TV screens.

However, the balance of confidence among industrialists swung from plus 1 - the slimmest possible margin of optimism - to minus 1 - the slimmest possible margin of pessimism. Industry is usually the sector affected most by changes in foreign demand, as a high proportion of industrial goods are exported.

Euro-zone consumer confidence has been bolstered by falls in unemployment in recent years and this year's boost to disposable income from tax cuts in various member states.

However, retailers switched in March from a neutral stance on the future to a negative balance of four - showing that they remember how fickle consumer confidence can be.

The more economically aware among consumers might be worrying about Tuesday's euro-zone unemployment figures for February, published by EU statistical agency Eurostat. The jobless rate appears to have settled at 8.7 per cent.

The Business Times, Network House, Vjal ir-Rihan San Gwann SGN 07
Tel: (356) 382741-3, 382745-6 | Fax: (356) 385075 | e-mail: editorial@networkpublications.com.mt