Eurozone consumer confidence rebound more than offsets decline within industry in November
By Alexander Bueso
Date: Tuesday 29 Nov 2022
(Sharecast News) - Economic sentiment in the single currency block registered its first increase since February on the back of a rebound in consumer confidence, the results of a closely followed survey revealed.
Industrial sentiment on the other hand continued to decline.
The euro area Economic Sentiment Index improved from a reading of 92.7 for October to 93.7 in November (consensus: 93.5), the European Commission said.
Net revisions added 0.2 points to November's ESI reading.
Brussels also confirmed a preliminary reading for the consumer confidence sub-index of -23.9, which was up from the previous month's print of -27.6.
A sub-index for industry sentiment however deteriorated for a ninth consecutive month, from -0.3 to -2.0 (consensus: -1.2).
Italy's ESI improved the most, by 4.1 points, while those for the Netherlands and Germany improved by 1.2 and 1.1 points.
In Spain on the other hand, the ESI fell by 1.7 and in France by -1.6.
At the euro area level, the sub-index for confidence in services edged up from 2.1 to 2.3, that for retail trade was unchanged at -6.7 and that for Construction dipped from 2.6 to 2.3.
Investment intentions in both manufacturing and services declined in October/November from the levels predicted in March/April.
The Employment Expectations Indicator on the other hand increased by 1.4, thanks to greater optimism for hiring, especially in services, as well as in industry, offset by more downbeat assessments in retail trade while in construction employment plans for the next quarter were described as broadly unchanged.
On prices, expectations for selling prices cooled in industry and retail trade, as well as in services and construction albeit to a lesser extent.
Consumer price expectations continued to decline alongside, the Commission added.
But in the same report it went on to add that: "consumers' perceptions of price developments over the past twelve months reached another all-time high."
"The small increase in the EC Economic Sentiment Indicator (ESI) for November suggests that prospects for the euro-zone economy are no longer deteriorating. While we still expect a recession, it is likely to be shallower than we had previously anticipated," said Andrew Kenningham, chief Europe economist at Capital Economics.
"[...] Nonetheless, the index is still much lower than it was as recently as August and very low by past standards. It remains consistent with the economy stagnating at best."
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