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Euro zone sentiment drops in November as second COVID wave strikes

Economic IndicatorsNov 27, 2020 05:30AM ET
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© Reuters. FILE PHOTO: European Union flags flutter outside the European Commission headquarters in Brussels

BRUSSELS (Reuters) - Euro zone economic sentiment fell for the first time in seven months in November as a second COVID-19 wave struck the continent, depressing the mood in all sectors, particularly those hardest hit by lockdowns such as services and retail.

The European Commission's monthly survey showed sentiment in the 19 countries sharing the euro fell to 87.6 points from 91.1 in October, a shade above market expectations of a decline to 86.5 points.

The survey is typically conducted in the first two to three weeks of the month, meaning they relate to the mood after a series of lockdowns were announced, including in the euro zone's two largest economies, Germany and France.

"After the partial recovery of sentiment between May and September and the broad sideways movement in October, the drop is the first one since sentiment fell sharply in the first COVID-19 wave," the European Commission said in its report.

The decline of sentiment, it said, was fuelled by diving confidence in retail, services and among consumers. Sentiment in industry and construction, which have been largely spared in lockdowns, suffered only mild declines.

In all cases, the view of future business worsened.

Sentiment in services, the euro zone economy's biggest sector producing some two thirds of gross domestic product, slipped to -17.3 from -12.1. Economists polled by Reuters had expected a fall to -15.5 points.

Sentiment among consumers fell to -17.6 in November from -15.5 points in October, in line with the flash estimate released last week.

The mood in industry dropped to -10.1 from -9.2, just above expectations of a fall to -10.5.

Inflation expectations in industry declined to 0.2 points from 0.7 but rose among consumers to 15.4 points from 13.3 in October. Both were below the average values since 2000.

For European Commission data click on:

Euro zone sentiment drops in November as second COVID wave strikes

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