By ILONA BILLINGTON LONDON—Concerns over the euro-zone economy weighed more heavily on consumers and businesses alike in December, with recession fears likely growing, a survey from the European Commission showed Friday. While a separate measure of the euro-zone business climate rose for the first time in 10 months, the survey remains steeply negative. It confirms that despite an increase in manufacturing export orders, the industrial sector is only marginally less pessimistic than a month earlier. The overall economic sentiment indicator among the 17 countries that share the euro fell for a 10th straight month to 93.3. That was down from 93.8 in November and is the lowest level in more than a year, although it is still more than 20 points above the record low of 69.6 in March 2009. "December's fall in euro-zone economic sentiment... confirm that the euro-zone economy is in a very bad state," said Jennifer McKeown, European economist for Capital Economics. "In all, today's data support our view that the euro-zone is heading into a much deeper recession than the consensus forecast suggests. We expect a fall in GDP of about 1% this year and an even sharper decline in 2013." The further drop in the ESI reflects weaker outlook across all but one of the sub-sectors, the survey shows. Confidence among manufacturers held steady at minus 7.1 in December from November, and was likely held up by the surprisingly resilient German industrial sector. Elsewhere, consumer confidence declined further to minues 21.1 from November's minus 20.4. The services sector was also increasingly pessimistic, with the measure here falling to minus 2.1 in December from minus 1.6 a month earlier. The retail and construction sectors also declined further in December to minus 11.7 and minus 25.2 respectively, from minus 11.1 and minus 25. The business climate survey, meanwhile, improved to minus 0.31 in December from minus 0.42 in November. While this was the first improvement since February last year, it still represents a weak business environment, with some firms viewing tentative signs of improving orders and activity cautiously. The EC said that much of the sectoral weakening was a result of poor conditions in recent months, although consumers are increasingly concerned over their own future financial situation as well as job security.

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