Eu­ro­zone eco­nomic sen­ti­ment at high­est since 2001

Irish Independent - - Business - Franceso Guaras­cio

EU­RO­ZONE eco­nomic sen­ti­ment rose in Oc­to­ber for the fifth con­sec­u­tive month to reach its high­est level since the start of 2001, show­ing al­most no im­pact from the Cata­lan cri­sis, ac­cord­ing to Euro­pean Com­mis­sion data.

The near 17-year high is the high­est read­ing since Jan­uary 2001 when the burst­ing of the dot-com bub­ble had be­gun to hit con­fi­dence.

The monthly sur­vey showed that sen­ti­ment in the Eu­ro­zone rose more than fore­cast on av­er­age by economists polled by Reuters to 114.0 points in Oc­to­ber from 113.1 the pre­vi­ous month.

Con­fi­dence grew markedly in Ger­many, the bloc’s largest econ­omy, and in Italy, while it de­clined in France.

De­spite the un­cer­tain­ties sur­round­ing the Cata­lan cri­sis, sen­ti­ment im­proved also in Spain, with marked rises in the in­dus­try and ser­vices sec­tors. But con­fi­dence dropped in the coun­try’s re­tail sec­tor and among con­sumers.

Data shows that “po­lit­i­cal ten­sions con­tinue to have lit­tle ef­fect on eco­nomic sen­ti­ment this year”, Bert Colijn, se­nior econ­o­mist at ING said.

The EU statis­tics of­fice Euro­stat will re­lease pre­lim­i­nary es­ti­mates to­day on the bloc’s gross do­mes­tic prod­uct (GDP) in the third quar­ter.

Fore­casts by economists polled by Reuters put the ex­pect- ed growth fig­ure at 0.5pc. If the 0.5pc fore­cast were con­firmed by ac­tual data, that would be a slight slow­down from the 0.6pc growth recorded in the sec­ond quar­ter.

But economists re­main con­fi­dent growth will ac­cel­er­ate again in the last three months of the year.

“While the avail­able hard data im­ply that Eu­ro­zone GDP growth slowed a lit­tle in Q3, we think that it will pick up again in Q4,” eco­nomic re­search firm Cap­i­tal Eco­nom­ics said in a note.

In Oc­to­ber, op­ti­mism in the Eu­ro­zone grew in all sur­veyed eco­nomic sec­tors, jump­ing to 16.2 points from 15.4 in Septem­ber in ser­vices, the largest sec­tor in the Eu­ro­zone.

Con­fi­dence in in­dus­try grew to 7.9 from 6.7 and the re­tail sec­tor saw a rise of sen­ti­ment to 5.5 from 3.0.

Con­sumers shared the pos­i­tive mood, with op­ti­mism ris­ing to the high­est level in 16 years.

The pos­i­tive read­ing for the 19-coun­try bloc shar­ing the euro was only partly clouded by a drop in in­fla­tion ex­pec­ta­tions among man­u­fac­tur­ers to 8.6 from 10.5 in Septem­ber.

That could po­ten­tially curb out­put in com­ing months. Man­u­fac­tur­ing pro­duc­tion ex­pec­ta­tions dipped slightly, while ex­port or­der books rose only marginally.

In­fla­tion ex­pec­ta­tions among con­sumers con­tin­ued in­stead to in­crease, to 14.7 from 14.2 in Septem­ber. (Reuters)

Pro­test­ers wave Span­ish, Cata­lan and Euro­pean Union flags dur­ing a pro-unity demon­stra­tion in Barcelona at the week­end

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