Euro zone companies warn of slowing economy, China competition, ECB poll shows.
Euro zone companies are facing a slowing economy and increased competition from China as U.S. tariffs dent confidence and force rivals to seek new markets, a European Central Bank poll showed on Friday.
The ECB left interest rates unchanged on Thursday and offered a modestly upbeat assessment of the euro zone economy, raising doubts among investors about further policy easing even as U.S. tariff threats cloud the outlook.
But an ECB survey of 72 large companies operating in the euro area pointed to a slowdown in the manufacturing and services sectors, resulting in a more subdued outlook for employment and prices.
The ECB contacted the companies between June 23 and July 2.
“Contacts reported a slowdown in activity in recent months as tariffs, geopolitical tensions and the resulting uncertainty dented business and consumer confidence,” the ECB said. “The feedback from contacts was consistent with very modest growth in both the second and third quarters.”
This had mostly affected intermediate goods so far and had “little to no impact on final consumer prices,” but it was expected to broaden in the coming months and quarters.
Wage growth was expected to slow from the 4.5% pace recorded last year, but by less than in the previous survey. Companies now forecast pay rising by 3.3% this year and by 2.8% in 2026.
Source: Investing
