Euro zone sentiment drops for 10th straight month

BRUSSELS: Euro zone economic sentiment dipped for the 10th consecutive month to its lowest level in more than two years in April as managers in industry and the retail sector became more downbeat.

Sentiment slipped to 104.0 points in April from 105.6 in March, the European Commission said on Monday, marking the lowest level since September 2016.

Economists polled by Reuters had expected a lesser decline to 105.0.

The survey adds to evidence that economic prospects of the 19-member euro zone for the start of 2019 are muted after only modest growth of 0.2 percent quarter-on-quarter in the third and fourth quarters of 2018.

An initial estimate for the first quarter is due out on Tuesday, with an average expectation of 0.3 percent growth.

Sentiment in industry fell for a fifth consecutive month to -4.1 points in April from -1.6 points in March, well below market expectations of -2.0.

Views of production expectations, current order books and stocks of finished products deteriorated.

By contrast, sentiment in services, a sector which produces two thirds of the euro zone GDP, was unchanged at 11.5 points in April, against expectations that it would dip to 11.1.

The mood of consumers declined to -7.9 points in April from -7.2 in March, while sentiment in retail trade dropped to -1.1 from 0.3.

Among the major countries, overall economic sentiment fell in Germany, France, Italy and Spain, but did improve in the Netherlands.

A separate business climate indicator, which helps point to the phase of the business cycle, dropped to 0.42 points in April from 0.54 in March and below the 0.49 average forecast in a Reuters poll. It was the lowest reading since August 2016.