Investing.com - Confidence in the euro zone declined for an eighth straight month, marking a fresh two-year low as manufacturers became more downbeat in an environment plagued with trade uncertainties.
The European Commission said Wednesday that its indicator for business and consumer economic sentiment in the euro area dropped 0.2 points to 106.1 in February, hitting its lowest level since November 2016.
“Broadly unchanged euro-area sentiment resulted from weaker industry and construction confidence in combination with more upbeat signals from the services sector, as well as, to a lesser extent, retail trade and consumers,” the European Commission said in the report.
In the wider European Union, the headline indicator dropped 0.9 points, due to a significant deterioration of 4.5 points in the U.K., a non-euro zone economy.
The EU faces economic uncertainty as it negotiates the U.K.’s departure from the bloc - currently scheduled to take place on March 29 - and future trade agreements between the two parties are unresolved.
Adding to concern for the region’s manufacturers, Europe is awaiting U.S. President Donald Trump’s decision on the possibility of raising tariffs on European automobiles imported stateside.
“While February’s surveys do justify some optimism about a cautious bounce back, the manufacturing sector problems and downside risks like Brexit and higher tariffs for the auto sector could still develop into something serious,” Bert Colign, euro zone senior economist for ING, commented on the report.