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Eurozone Economic Confidence Improves More Than Expected

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Eurozone economic confidence improved more than expected in November as sentiment among consumers and retailers strengthened, survey results from European Commission showed Thursday.

The economic sentiment index rose to 101.3 from 100.8 in October. The score was forecast to rise to 101.

The consumer confidence index improved to -7.2 in November from -7.6 in the previous month. The reading came in line with flash estimate. The moderate increase reflected households' more positive expectations about both the general economic situation and their future financial situation.

Likewise, the confidence index among retailers advanced to -0.2 from -0.9. The moderate improvement in sentiment resulted from more positive views on both the adequacy of the volume of stocks and the expected business situation.

The industrial sentiment index came in at -9.2 in November versus -9.5 a month ago. But this was slightly weaker than the expected -9.1.

Managers' more optimistic production expectations and assessments of the stocks of finished products improved. At the same time, their assessment of the current level of overall order books deteriorated slightly.

The services confidence index climbed marginally to 9.3 from 9.0 in the previous month. The expected score was 8.8.

Broadly stable services confidence was the result of improvements in managers' demand expectations and views on the past business situation, which were offset by a fall in managers' assessment of past demand.

Meanwhile, in construction, the indicator fell to 3.1 from 4.4. Lower construction confidence was due to managers' more pessimistic employment expectations and worsened assessments of the level of order books.

Another survey from EU showed that the business climate indicator remained broadly unchanged at -0.23 in November versus -0.20 in October.

Managers' assessments of overall order books and past production deteriorated, while their production expectations and assessments of the stocks of finished products advanced from October.

The survey adds to the evidence that the Eurozone economy is unlikely to have gained pace towards the end of 2019, Melanie Debono, an economist at Capital Economics, said.

The European Central Bank will need to ease policy further, by increasing asset purchases and cutting rates further below zero, the economist added.

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