Slump in European economic confidence slows: EU

BRUSSELS: European consumer and business confidence slumped to a new record low in March although the pace of decline slowed in a possible sign of stabilisation, according to an EU survey on Monday.

The European Commission's economic sentiment indicator for the 16-nation eurozone eased to 64.6 points in March, from 65.3 points in February, hitting the lowest point since the survey began in 1985.

In the 27-nation European Union, the index fell to 60.3 points from 60.9, as the rate of decline slowed after a series of sharp drops when the economic crisis took a turn for the worse last September.

"March's small fall in the EC's economic sentiment index adds to the evidence that eurozone business and consumer confidence is beginning to stabilise, albeit at very low levels," said Jennifer McKeown at consultants Capital Economics.

While the outlook in the industrial and service sector continued to deteriorate, the retail industry saw an improvement in both the eurozone and the broader EU.

Consumer confidence weakened only slightly in the eurozone and was stable in the EU even though the economy remains in the grip of the worst recession in decades.

Meanwhile, the commission's separate business climate indicator also continued to worsen, falling to its lowest level since it started in 1985. The index fell to negative 3.58 points from negative 3.40 points.

Despite the slower decline in overall economic sentiment, economist Howard Archer at consultants IHS Global Insight said the European economy was not out of the woods yet.

"The further deterioration in economic sentiment in March bodes ill for investment, employment and consumer spending across the eurozone, and heightens fears that the region faces further acute contraction in the near term," he said.