FRANKFURT (Reuters) -Euro zone firms were reporting improved business momentum in the weeks leading up to the Trump administration’s early April tariff announcement, mainly reflecting an incipient recovery in the industrial sector, an ECB survey showed on Tuesday.
Businesses said that while uncertainty remained high, there were signs of recovering demand for machinery and equipment, and also signals that construction activity was turning a corner, a survey of 79 leading non-financial companies showed.
The outlook has likely darkened since then as firms were asked between March 26 and April 2, before the financial market turmoil set off by the U.S. tariff announcements.
Last week the European Central Bank warned that downside risks to economic growth have increased significantly and that the trade war will lower economic growth.
Still, in the weeks before the turmoil, firms said even the employment outlook was improving slightly, even if most of their focus was on efficiency and not hiring more workers.
Until the end of March, firms also said they were taking a wait-and-see stance about tariffs and were not yet reassessing major investments, the ECB added.
(Reporting by Balazs Koranyi; Editing by Jan Harvey)
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