VIENNA (Alliance News) – Eurozone economic confidence strengthened unexpectedly in July indicating that the single-currency region shrugged off the negative impact from the “Brexit” vote, while the weakness was evident in the EU and the UK

The economic sentiment index rose to 104.6 in July from 104.4 in June, survey results from the European Commission showed Thursday. Economists had forecast a fall to 103.5.

On the other hand, the economic confidence index for the EU weakened to the lowest level in four months in July. The corresponding index fell to 104.8 from 105.7 in June.

The economic sentiment indicator for the UK declined more markedly in July to a three-year low of 102.6 from 107 in June.

So far the early signs are that the UK’s vote for “Brexit” has had little, if any, impact on regional growth, William Jackson, an economist at Capital Economics, said.

In the euro area, economic sentiment remained resilient as the fall in consumer confidence was offset by increases in the industry, retail trade and construction sectors.

The industrial confidence indicator improved to -2.4 from -2.8 a month ago. The improvement in sentiment resulted from managers’ more optimistic assessment of the current level of overall order books and healthier assessments of the stocks of finished products.

The services confidence index climbed to 11.1 from 10.9 in June. The increase resulted from managers’ significantly brighter demand expectations.

Meanwhile, the consumer sentiment index fell to -7.9, in line with the flash estimate, from -7.2 points in the prior month. The decline reflected more negative assessments of the future general economic situation and future unemployment and consumers’ savings expectations.

At the same time, the indicator for retail trade climbed to 1.8 from 0.8 in June on more positive views on both the present and the expected business situation.

The confidence index for construction improved to -16.3 from -18.2 in June. The marked rise in confidence was fueled by upward revisions in both managers’ employment expectations and their assessment of the level of order books.

Another survey from the EU showed that the business sentiment index rose unexpectedly to 0.39 from 0.22 in June. The score was above the expected level of 0.17.

While managers’ production expectations worsened, their appraisal of overall order books, the level of export order books, the stocks of finished products and, in particular, past production were appraised more positively, the survey showed.

Copyright RTT News/dpa-AFX

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