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Eurozone: Improvement in economic sentiment registered - ING

FXStreet (Delhi) – Bert Colijn, Research Analyst at ING, notes that even though concerns about the weak global economy are dominating headlines at the moment, European businesses have become more upbeat about the economic situation as the economic sentiment improved in September, from 104.1 to 105.6.

Key Quotes

“Europe’s struggling industry saw the strongest improvement in confidence since March, reaching the highest level of the indicator since 2011. The Volkswagen scandal is not yet picked up by the data, but it seems that regardless of any emissions, Eurozone industry could be shifting into higher gear.”

“The service sector continues to perform well too, mostly on the back of strengthening domestic demand. The current level of the indicator is much higher than it was for most pre-crisis years. In fact, the service sector as a whole has seen sentiment improve sharply over the past months.”

“The improvements came for a large part from Germany, which saw economic sentiment improve from 105.8 to 107.7. It was also encouraging to see that Greece experienced a bounce back from the dramatic decline in sentiment it experienced in August, from 75.2 to 83.1. This shows that confidence in the current situation is increasing in Greece, even though it is still far from the 92.7 it experienced in May.”

“Besides that, the improvements in France and Italy, mostly because of consumer confidence improvements, were positive. This could point to a broader base for growth in the Eurozone. It is too early to say that growth will pick up in the rest of the year, but it does seem that a growth rate of 1.5 percent is realistic for 2015, which has again been a year of considerable turmoil.”

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