Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Confidence Still On Upward Trend

Published 11/29/2013, 05:08 AM
Updated 03/09/2019, 08:30 AM
Recent data on the activity front have been mixed. GDP growth eased in Q3 (0.1% q/q after 0.3% q/q) and the composite PMI for the Eurozone slightly declined in November (to 51.5) for the second month in a row. Survey data from the European Commission send a more positive message. Indeed, the European Commission Economic Sentiment Indicator (ESI) kept on improving in November. The index came in at 98.5, 0.8 pt above October’s reading, and now pretty close to its long term average.

Admittedly, the pace of improvement has clearly decelerated over the last few months. ESI rose by 3 points over the last three months (from August to November), nearly half the increase observed during the previous three months (5.8 pts from May to August).

Other details of the survey are more positive. Indeed, the improvement has been widespread among the Eurozone: +0.8 pt in Germany and even +1.9 pts in Italy, +1.4 pts in Spain and +1.3 pts in the Netherlands. The overall increase in the Eurozone was curbed by an exception française, where the index fell 0.9 pt.

The breakdown by sectors shows that confidence in services (+2.9 pts) and, to a lesser extent in industry (+1.1 pts) recorded strong improvements, which is, in our view, a sign that the cyclical recovery is still gaining traction. In these sectors, balances of opinion regarding both future and past activity were on the upside. The weakness of the overall index came from poor evolution of confidence in retail trade and construction and among consumers over the last two months. Indeed, and as long as growth will not have accelerated enough to drive unemployment down, the consumer outlook will remain a drag on the improvement of confidence.

Tomorrow Eurostat will release its inflation flash estimate, which we expect slightly on the upside, but still below 1% y/y in November. A week ahead of the next ECB Governing Council’s meeting, data still point to a weak recovery, for which any available support would be welcome.

BY Frédérique CERISIER

To Read the Entire Report Please Click on the pdf File Below.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.