The Conference Board Economics Watch^® - European View

Restoration of Confidence Has Stalled, Delaying Euro Area Recovery

• The Conference Board Leading Economic Index® (LEI) for the Euro Area fell in March after slowing in February, suggesting that chances for near-term recovery have fallen
• Business confidence remains weak and current surveys of business activity suggest Euro Area and most countries still in contraction
• Cyprus’s banking crisis has reduced financial stability, which is a major factor preventing business sentiment from improving
• Although energy costs have been stable recently, Europe’s economies remain heavily reliant on oil and natural gas, leaving them vulnerable to price volatility
• However, European economies are becoming more energy efficient, especially in manufacturing
• Increased natural gas production in United States will not affect European growth environment much over short and medium term