Services drive improvement in euro area economic sentiment in September
By Alexander Bueso
Date: Tuesday 29 Sep 2020
(Sharecast News) - Economic sentiment within the single currency bloc picked up last month, with confidence improving across all sectors of the economy, especially in services.
The European Commission's economic sentiment index rose from a reading of 87.5 in August to 91.1 for September.
A sub-index tracking confidence in services rebounded the most, rising from -17.2 to -11.1.
However, that for industry only increased from -12.8 to -11.1 (consensus: -10.0).
Consumer confidence also improved a bit, with the corresponding sub-index up to -13.9, in line with the preliminary estimate published on 22 September, versus a print of -14.7 for the month before.
"In contrast, the rapid rises in manufacturing sentiment which drove the early stages of the recovery now appears to be petering out," said Bethany Beckett at Capital Economics.
"While sentiment picked up in most countries, it fell back in Romania and the Czech Republic and dropped sharply in Slovakia. Most of the gains from pent-up demand have already occurred, and the recovery from here is likely to be much slower.
"The latest batch of ESIs showed little sign that the rise in virus cases across much of CEE this month has begun to weigh on sentiment. But given the pace and scale of the recent rise in cases and the possible tightening of restrictions, a hit to sentiment is unlikely to be avoided in the coming months."
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