Eurozone economic confidence improved to a one-year high in February on rising sentiment in industry, services and among consumers, reflecting the easing of strict restrictions related to Covid-19 pandemic, survey results from the European Commission revealed on Thursday.
The economic sentiment index rose more-than-expected to 93.4 from 91.5 in the previous month. The score was forecast to climb to 92 in February.
February’s renewed rise in the economic confidence still left it at a depressed level by pre-pandemic standards and supports the view that activity will remain weak in the first quarter, Jessica Hinds, an economist at Capital Economics, said.
Industry confidence improved for the third month in a row, thanks to positive developments in all three components, especially managers’ production expectations.
The industrial sentiment index climbed to -3.3 from -6.1 a month ago and this was also better than economists’ forecast of -5.
The services sentiment index came in at -17.1, up from -17.7 in the prior month and economists’ forecast of -18.1. The improvement was driven by managers’ more positive assessment of the past business situation and improved demand expectations.
The consumer confidence index improved to -14.8 from -15.5 in January. The reading matched the flash estimate. The small rebound in consumer confidence reflected an improvement in households’ assessments of their future financial situation.
Meanwhile, the indicator for construction rose only marginally to -7.5 from -7.7 a month ago, as managers’ improved appraisal of the level of order books was mostly offset by more muted employment expectations.
The retail trade confidence index fell to -19.1 from -18.5. The slight decline resulted from marked deteriorations of managers’ assessments of the past business situation and the adequacy of the volume of stocks.
Driven by upgraded employment plans, the Employment Expectations Indicator increased +1.8 points to 90.9 in February.
On the price front, the survey showed that managers’ selling price expectations firmed in retail trade, construction and, very markedly in industry. Selling price expectations remained virtually unchanged in services. Consumer price expectations increased only slightly.
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