Economic sentiment in the euro area declined from historically elevated levels for the second consecutive month in February, after a bout of financial market volatility.
The eurozone economic sentiment indicator decreased to 114.1 in February from 114.9 in January, hit by significant decline in consumer confidence and smaller decreases in industry, retail trade and construction, the European Commission said. Services confidence increased by 0.7 point.
"The drops in consumer and manufacturing future expectations suggest sensitivity to the recent market turmoil has played a role in the decline in the index," said Bert Colijn, senior economist at ING Research. "As markets have been recovering somewhat, a bounce back in March seems possible."
Significant backlogs of work, higher levels of production and improved hiring suggest the eurozone economy should continue to gather strength in the foreseeable future, Colijn said.
Consumer confidence declined by 1.3 points, sapped by lower expectations regarding future unemployment and savings. Households' assessment of the future general economic situation and their financial situation declined slightly from the previous month.
Industry confidence fell by 1.0 points from the previous month.