EURO ZONE BUSINESS CLIMATE INDICATOR CONTINUES DECLINE

In October 2011, the Business Climate Indicator (BCI) for the euro zone declined for the eighth month in a row, the European Commission said on October 27.
 
The steady fall observed since March points to a significant slowdown in industrial production growth, according to the Commission.
 
The drop in the BCI in October was mainly driven by a gloomier assessment of production trends observed in recent months, as well as by increased pessimism about overall order books and export order books.
 
On the other hand, production expectations deteriorated only marginally further compared to the strong decreases registered in the previous two months.
 
Assessments of stocks continued to increase from historic lows.
 
Meanwhile, in October, the Economic Sentiment Indicator (ESI) remained broadly unchanged in both the EU (-0.1 points) and the euro area (-0.2), at a level of 93.8 and 94.8, respectively.
 
Underlying this overall unchanged picture are a number of mixed signals across sectors.
 
Further declines in sentiment in industry and among consumers were offset by increases in services, retail trade and construction in the EU, as well as by an increase in construction and a very minor improvement in services in the euro area.
 
Among the largest European Union member states, Germany (-0.8 points), the Netherlands (-0.6), and Poland (-0.6) reported decreases in sentiment, while France (+1.2) and Italy (+0.3) showed an improvement.
 
Meanwhile, the readings for the UK and Spain remained broadly unchanged. The ESI stayed above its long-term average only in Germany.