Economic confidence in the eurozone picked up in October from a 10-month low, with broad based improvement across sectors, the results of a survey by the European Commission showed Thursday.
The economic confidence index rose unexpectedly to 100.7 in October from 99.9 in the prior month. The score was expected to fall to 99.7.
Among the sub-indices, the industrial confidence index climbed to -5.1 from -5.5 in the previous month, while it was expected to remain unchanged at -5.5.
The increase in industrial confidence resulted from managers’ more optimistic views on future production and the current level of overall order books, while their assessment of stocks of finished products remained broadly stable.
At the same time, the services sentiment index came in at 4.4, up from 3.2 in September. The marked improvement in services confidence was driven by managers’ significantly brighter views on past demand and demand expectations.
Likewise, the consumer sentiment index rose to -11.1, in line with the flash estimate, from -11.4 a month ago. Assessment of future general economic situation and future unemployment improved in October, while consumers’ expectations of their financial situation and future savings remained broadly unchanged.
The construction sentiment indicator improved to -24.6 from -27.7 in September. The marked rise of 3.1 points was fueled by upward revisions in both managers’ employment expectations and their assessment of the level of order books.
Confidence among retailers also strengthened, with the indicator rising to -6.4 from -7.3 in the prior month.
The positive development in retail trade confidence reflected more positive views on the expected business situation and on the adequacy of the volume of stocks, while managers’ assessment of the present business situation remained broadly unchanged.
Another survey from the European Commission showed that the business climate index came in at 0.05 in October, up slightly from 0.02 in September.
Managers’ production expectations as well as their evaluation of overall and export order books brightened, while their assessment of the stocks of finished products and past production remained broadly stable.
The survey eases pressure on the European Central Bank to come up with any more stimulative measures in the near-term and seemingly gives it a little more breathing space while its June and September initiatives increasingly kick in, IHS Global Insight’s Chief European Economist Howard Archer, said.
The Eurozone economy remains stuck in a stop-and-go recovery scenario, which still makes it vulnerable to external shocks, Peter Vanden Houte, an economist at ING Bank NV, noted. To reach escape velocity the upturn might need some further policy stimulus.
GDP data released earlier in the day showed that Spain’s economy grew at a slightly slower pace in the third quarter. GDP expanded 0.5 percent quarter-on-quarter after rising 0.6 percent in the second quarter. On a yearly basis, growth accelerated to 1.6 percent from 1.3 percent a quarter ago.
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