Eurozone Economic Sentiment At 6-Month High

Eurozone economic confidence index reached a six-month high in September driven by waning pessimism in industry, retail trade, construction and services, survey data from the European Commission showed Tuesday.

The economic confidence index rose to 91.1 in September from 87.5 in August. This was the highest score since March and above economists’ forecast of 89.0.

The indicator remained at a low level and it does not accurately capture the negative impact of the most recent coronavirus restrictions, Andrew Kenningham, an economist at Capital Economics, said.

Unless the second wave of the virus is brought under control, euro-zone GDP may well contract again in the fourth quarter, the economist noted.

The industrial sentiment index came in at -11.1 versus -12.8 in the previous month. Sentiment continued to catch up reflecting improvements in managers’ appraisals of the adequacy of stocks of finished products and the current level of overall order books.

Due to managers’ much less negative views on the past business situation and past demand, the services confidence indicator advanced to -11.1 from -17.2 a month ago.

At 13.9, the consumer confidence index matched the flash estimate and was better than Augusts’ score of -14.7.

The slight improvement in consumer confidence resulted from a marked pick-up in expectations about the general economic situation and a small improvement in households’ views on their financial conditions over the next 12 month.

At the same time, the retail trade sentiment improved to -8.7 from -10.5 a month ago. The continued but slowing recovery in sentiment resulted from retailers’ more benign views on the past business situation and the adequacy of the volume of stocks.

The construction confidence index came in at -9.6 compared to -11.8 in the previous month. There was an important improvement in managers’ employment expectations and a slight improvement in their assessment of the level of order books, the survey showed.

The business confidence indicator rose to -1.33 in August from -1.80 in the prior month.

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