(Bloomberg) — Confidence in the euro-area economy slipped for the first time this year, suggesting that supply disruptions and the resurgent pandemic risk damping the recovery.
Sentiment eased in services, industry and among consumers, with a European Commission gauge falling to 117.5 in August from an all-time high the previous month. At the same time, an increase in selling-price expectations suggests inflation pressures are building across the bloc.
The region’s economic outlook has clouded in recent weeks. A shortage of raw materials, quickly climbing costs and transportation bottlenecks are disrupting manufacturing, while quickly rising coronavirus infections threaten new restrictions on services, which took over as a growth driver this month.
Industry order books deteriorated in August, according to the survey, and services managers were less positive on future demand. Consumers expressed concerns about the general economic situation and were less willing to make major purchases.
The Bundesbank, Germany’s central bank, has already warned that economic growth this year may be somewhat lower than the 3.7% it had forecast in June, and companies are worried that the recovery will stall before it really took off.
Volkswagen AG restarted its Wolfsburg plant, the world’s biggest employing some 60,000 people, with only one shift this month. Audi, the group’s biggest profit contributor, was forced to extend its summer break by one week at two factories in Germany amid “volatile and tense” semiconductor supply.
The European Central Bank is optimistic that its projections will hold after tourism-reliant economies such as Italy and Spain saw strong rebounds in the second quarter. Chief economist Philip Lane said in a recent interview the region is “broadly not too far away” from the 4.6% expansion it currently predicts for the year.
A gauge of employment expectations climbed in August to highest level in nearly three years.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
