Eurozone Services Sentiment Inches Down

The index measuring services confidence in the Euro Area inched down by 0.1 point from the previous month to 4.9 in March of 2026, the lowest since October of last year, but ahead of market expectations of 3.9. The result was in line with other leading indicators in the period showing that businesses are less optimistic about the economy following the outbreak of war in the Middle East, which triggered a surge in European energy prices. Still, sentiment gauges have not retreated to the extent feared as attempts to undercut higher borrowing costs raised activity in the near term.

The index measuring services confidence in the Euro Area fell by 1.8 points from the previous month to 5 in February of 2026, firmly below market expectations that it would improve to 7.5, to mark the lowest magnitude of confidence in four months. Firms dimmed their expectations on the evolution of demand in the upcoming three months (9.8 vs 11.1 in January), in line with a moderation in the evolution of employment in the upcoming three months (0.2 vs 1.2). The pullback in expectations matched a deterioration in the evolution of demand in the last three months (5.7 vs 8.8) as the assessment of business situation swung to the negative territory (-0.5 vs 0.5). In turn, selling price expectations eased for a second month (13.9 vs 14.1).

The index measuring services confidence in the Euro Area rose by 1.4 points from the previous month to 7.2 in January of 2026, reflecting the strongest confidence in two years, and ahead of market expectations of a softer increase to 6. Services providers displayed a rebound in the assessment of business over the past three months (1 vs -0.2 in December 2025) and the evolution of demand (9.2 vs 6.2) over the past three months, prompting a slight improvement in expectations of demand 11.4 vs 11.3) and employment (1 vs -0.2) in the upcoming three months. In the meantime, selling price expectations eased (14.1 vs 14.5) for the first time since September.