Brussels, 29 November 2010
November 2010: Economic Sentiment is gaining further momentum
Important notice: since May 2010 business surveys data are classified in accordance with an updated version of the Nomenclature of Economic Activities (NACE rev. 2) causing a potential break in series at this date.In November, the Economic Sentiment Indicator (ESI) improved further in both the EU and the euro area. The indicator increased strongly, climbing by 1.3 points to 105.2 in the EU and by 1.5 points to 105.3 in the euro area. These results were boosted by strong positive readings in Germany.
Economic sentiment indicator (s.a.)
EU: November 105.2 Euro area: November 105.3
A majority of Member States reported either improvement or stabilisation in sentiment. Among the seven largest Member States, Germany registered the most significant increase (+2.8), followed by Italy (+1.4). Improvement was less pronounced in the UK (+0.5) and in the Netherlands (+0.4), while sentiment remained broadly stable in Spain, Poland and France. In Germany, France, the UK and the Netherlands the ESI is above its long-term average.
Sentiment in services, which increased markedly by 2.1 in the euro area and by 3.0 in the EU, was the main contributor to the overall improvement. Most respondents in this sector reported brighter assessments of demand and business situation over the past three months. Confidence in industry improved by 0.9 points in the euro area and by 0.7 points in the EU, mainly driven by buoyant German industry. Gains in industrial confidence in the euro area reflected improvements in order books and production expectations. Export orders books have also become more upbeat, in both the EU and the euro area.
As indicated in the flash estimate released on 22 November, confidence among consumers gained momentum in the euro area (+1.5), while it increased only marginally in the EU (+0.5). Increased optimism about the general economic situation and a significant easing of unemployment fears in Germany contributed to the overall improvement. Sentiment in the retail sector decreased by 0.7 point in the EU and remained broadly unchanged in the euro area (-0.4). After improvements in September and October, sentiment in construction set back in both regions (-0.9 the EU and -1.0 in the euro area), mainly owing to sizeable negative readings in Spain.
Confidence in financial services –not included in the ESI– rebounded after two consecutive drops in both the EU and the euro area (+2.6 and +1.9 points respectively).
According to the six-monthly industrial investment survey, which was carried out in October and November of 2010, managers expect to increase their investment volumes by 4% in the EU and by 2% in the euro area in 2011 as compared to investment in 2010.
Industrial confidence indicator (s.a.)
EU: November 0.5
Euro area: November 0.9
Service confidence indicator (s.a.)
EU: November 7.8
Euro area: November 10.2
Consumer confidence indicator (s.a.)
EU: November -11.0
Euro area: November -9.4
Retail trade confidence indicator (s.a.)
EU: November 2.5
Euro area: November -1.5
Construction confidence indicator (s.a.)
EU: November -28.5
Euro area: November -26.4
Financial services confidence indicator (n.s.a.)
EU: November 18.4
Euro area: November 21.0
The next Business and Consumer Survey is due to be published on 6 January 2011.
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