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Eurozone Economic Confidence At 9-Month High

eurozoneflag aug23 27feb20 lt

Eurozone economic confidence strengthened to a nine-month high in February, survey results from the European Commission showed on Thursday.

Rising for the fourth straight month, the economic sentiment index came in at 103.5 in February, versus a revised 102.6 in January. Economists had forecast the reading to fall to 102.6 from January's initial estimate of 102.8.

Industrial confidence improved for the second straight month as managers' appraisals of the current order books rose by the highest margin in around two and a half years. The corresponding index climbed to -6.1 from -7.0 a month ago.

Largely due to households' brighter expectations in respect of the general economic situation, the consumer sentiment index improved to -6.6, in line with estimate, from -8.1.

Reflecting stable demand expectations and views on the past business situation, the services confidence indicator advanced slightly to 11.2 from 11.0.

Meanwhile, the retail trade confidence indicator fell slightly to -0.2 from -0.1 in the previous month, as more cautious views on the present business situation and volume of stocks were counterbalanced by a brighter than expected business situation.

At the same time, the construction sentiment index dropped to 5.3 from 5.8 in January, indicating a combination of grimmer assessments of the level of order books and more optimistic employment expectations.

The new employment expectations indicator eased mildly by 0.3 points to 105.0 in February.

Peter Vanden Houte, an ING economist, said economic sentiment improved showing that the manufacturing sector is set for a recovery.

The business climate indicator improved to -0.04 in February from -0.19 in January. This was the highest score in eight months.

However, the survey was done at a time when Europe considered Covid-19 largely a Chinese problem with some minor negative effects on the rest of the world, the economist noted.

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