Economic Sentiment Indicator improves in EuropeStaff writer ▼ |
While the upward trend observed since May has been preserved, the improvement in confidence has noticeably decelerated over the past two months, mirroring differences in developments across sectors.
In the euro area, the ESI's increase was driven by improved confidence in services and industry. Confidence weakened among consumers and in construction and remained broadly unchanged in retail trade. Economic sentiment improved in four out of the five largest euro area economies, i.e. Italy (+1.9), Spain (+1.4), the Netherlands (+1.3) and Germany (+0.8), while it deteriorated in France (-0.9).
The increase in industry confidence (+1.1) resulted mainly from an important improvement in managers' assessment of the current level of overall order books. Their production expectations increased as well, though to a lesser degree, while their assessment of the stocks of finished products remained broadly stable. Also managers' assessments of the past production and the current level of export order books, which are not included in the confidence indicator, improved markedly in November.
Services confidence registered a strong increase (+2.9), resulting from far better assessments of past demand and the past business situation. Managers' demand expectations improved markedly too. Consumer confidence declined (-0.9), putting a halt to the upward trend observed since December 2012. This was mainly due to a sharp decline registered in France, and reflected worsening expectations about the future general economic situation, unemployment expectations and savings over the next 12 months.
By contrast, consumers' views on the future financial situation of their households improved. Retail trade confidence remained broadly unchanged, resulting from an important improvement in managers' business expectations, which was offset by worsening views on the volume of stocks. Retailers' assessment of the present business situation remained virtually unchanged.
Confidence in the construction sector decreased ( 0.9), resulting from managers' worsened assessment of both order books and employment expectations. Financial services confidence (not included in the ESI) decreased by 3.7 points. While managers' views of the past business situation became more positive, views of past demand and demand expectations deteriorated. ■