Optimism on European Growth Reverses as Headwinds Mount

Global trade tensions, falling confidence among manufacturers—and now Turkey crisis—damp hopes for business investment splurge

Europe’s economy has slowed, and seems unlikely to bounce back strongly in what remains of a year that began with high hopes and then hit a series of setbacks.

With the eurozone economy facing capacity constraints as 2017 drew to a close, policy makers had hoped that optimistic businesses would go on an investment splurge.

But as confidence...