BRUSSELS (Alliance News) – Eurozone economic confidence improved to an 11-month high in November as upbeat assessments of consumers and retailers offset the weakness in industrial sentiment, survey data from the European Commission showed Tuesday.
The economic sentiment index rose slightly to 106.5 from 106.4 in October, but below the expected score of 106.8. This was the highest since December 2015, when the reading was 106.6.
The industrial confidence index dropped unexpectedly to -1.1 November from -0.6 points in October. The reading was forecast to rise to -0.5.
Slight deterioration in the industrial confidence was driven by managers’ more cautious assessments of the stocks of finished products and the current level of overall order books.
Meanwhile, the services confidence index held steady at 12.1 in November. The unchanged level of services confidence reflects brighter demand expectations in combination with more negative appraisals of the past business situation and broadly unchanged views on past demand.
At the same time, the consumer sentiment indicator improved to -6.1, as initially estimated, from -8 in October. The increase in confidence was fueled by significantly brighter expectations regarding the future general economic situation and future unemployment.
The retail trade confidence rose to 1.5 from 0.4 a month ago. Likewise, the confidence indicator for construction climbed to -12.7 from -14.2 in October.
The business climate index fell to a three-month low of 0.42 in November from 0.56 in October, another report from the EU showed today.
Managers’ assessments of the past production deteriorated significantly, and their views on overall/export order books and the stocks of finished products weakened slightly. By contrast, their production expectations remained virtually unchanged in November.
IHS Global Insight economist Howard Archer said a serious concern is that business and consumer confidence in the Eurozone could be increasingly pressurized over the coming months by political uncertainties – especially given that the UK’s Brexit vote in June and November’s election of Donald Trump as US President fuels concern over potential political shocks in the Eurozone.
Archer noted that it is also highly possible that the UK’s Brexit vote will impact more significantly on Eurozone confidence and activity in 2017 as the UK triggers Article 50.
Copyright RTT News/dpa-AFX