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Bert Colijn, senior economist at ING, notes that the Eurozone’s Economic Sentiment Indicator declined from 103.3 to 102.7 in July.

Key Quotes

“Worries about the eurozone economy persist in the third quarter, with economic sentiment continuing to decline in July. While consumer confidence improved, businesses shared a view of deteriorating sentiment across sectors.”

“For the service sector, this is especially worrying, as it’s defied the manufacturing downturn quite successfully up to now. Still, the underlying indicators provide some reason for cautious optimism as the decline was mainly due to a deterioration in expectations of future demand.”

“The industrial picture is more troubling. Order books continue to deteriorate, causing businesses to be more pessimistic about future production.”

“Eurozone GDP data for 2Q will be released tomorrow and a slowdown from 1Q is widely expected. With alarming July survey data, the question is whether 3Q can come in much better.”