Eurozone economic confidence improved for the first time in nine months in November driven by the rebound in consumer sentiment, survey results published by the European Commission revealed on Tuesday.
The economic sentiment index rose more-than-expected to 93.7 in November from 92.7 in October. The expected score was 93.5. The first increase since last February was driven by the improvement in consumer confidence, which more than offset a further fall in industry confidence.
The industrial confidence index unexpectedly fell to -2.0 from -1.2 in the previous month. The reading was weaker than the expected -0.5 and hit the lowest since January 2021.
Meanwhile, services sentiment halted its persistent decline since March. The corresponding index advanced to 2.3 from 2.1 a month ago and was also above economists’ forecast of 2.0.
Consumer confidence posted a strong improvement of 3.6 points after a milder rebound in October. The consumer sentiment index came in at -23.9, in line with flash estimate and up from -27.5 in October.
Sentiment among retailers remained unchanged in November, with the index score at -6.7. At the same time, confidence among contractors weakened slightly. The index stood at 2.3 versus 2.6 points in October. The small improvement in economic confidence suggests that prospects for the euro-zone economy may no longer be deteriorating, Capital Economics’ economist Andrew Kenningham noted. A recession is still expected but it is set to be shallower than previously anticipated, the economist said.
Fueled by more optimistic employment plans in industry and, particularly, services, the employment expectations indicator increased +2.0 points to 107.4 in November.