A recent survey by the European Central Bank reveals that in the weeks leading up to the U.S. government's early April tariff announcement, Eurozone businesses reported improvements in business momentum. This positive shift primarily reflects recovery signs in the industrial sector.
The survey, which included 79 major non-financial companies, indicates that despite high uncertainty, there are signs of rising demand for machinery and equipment, along with improving construction activities. However, since the survey was conducted from March 26 to April 2, before the tariff announcement sparked financial market turmoil, the business outlook might have dimmed since then.
Last week, the European Central Bank warned that the downside risks to economic growth have significantly increased and that a trade war could slow down economic growth. Despite the market turbulence, businesses noted slight improvements in employment prospects, even as they focused more on efficiency rather than hiring new employees.
As of the end of March, companies were still adopting a wait-and-see approach regarding the tariff measures and had not yet reassessed major investment plans.
