Economic and business confidence in the Eurozone tumble abruptly in August

Data released by the European Commission earlier on Tuesday showed that economic sentiment in the Eurozone edged lower in August. The Economic Sentiment Indicator for the month fell marginally to 103.5 from the July figure of 104.5 (revised from 104.6), and below expectations for a reading of 104.1.

Business sentiment in the single currency area also missed forecasts, fell sharply to a near three-year low in August, down from a reading of 0.38 in July to just 0.02 this month. Analysts expected a moderate fall to 0.36 from July. The Consumer Confidence Index fell to -8.5 from -7.9 the month prior, reflecting a diminishing view on future employment.

Confidence in the industrial sector suffered the sharpest reversal as surveyed manufacturers reported their worst deterioration in current orders since the 2009 financial crisis.  Industrial Confidence Index fell to -4.4 from -2.6 (revised from -2.4) last month and below the -2.7 expected.

Weak economic and business confidence in August is the first signs that concerns over the UK’s Brexit vote may be starting to bite on the continent. Four of the five largest Eurozone members saw slide in economic confidence.