Eurozone Economic Confidence Improves In November
Despite the 17-nation economy moving into a deep recession, Eurozone economic confidence strengthened in November, marking the first improvement since February, survey results from the European Commission showed Thursday.
The corresponding index rose to 85.7 from 84.3 in October and was above the consensus forecast of 84.5. Confidence strengthened in industry and retail trade, which was partly offset by decreases among consumers and construction.
Fueled by a much more positive assessment of the current level of overall order books, production expectations and the stocks of finished products, industrial confidence rose to -15.1 from -18.3 in October.
Confidence in services improved to -11.9 from -12.1. Due to better assessments of the present and expected business situation, retailers' sentiment picked up to -14.9 from -17.4 last month.
Meanwhile, the consumer sentiment index fell to -26.9 from -25.7 last month. Likewise, the index for construction dropped to -35.5 from -32.9.
A separate survey from the commission showed an improvement in business sentiment. The business climate index rose by 0.42 points to -1.19. The increase was reflected in all components, namely order books, past production, production expectations and the adequacy of stocks of finished products.
Despite an increase in sentiment during November, the Eurozone still looks highly likely to suffer further modest GDP contraction in the fourth quarter of 2012 and a return to growth is far from guaranteed in the first quarter of 2013, IHS Global Insight's Chief UK economist Howard Archer said.
The euro area shrank 0.1 percent in the third quarter and dropped 0.2 percent in the second quarter. The economy thus entered a technical recession.
The Organization for Economic Co-operation and Development this week said the euro area will remain in recession until early 2013, leading to a mild contraction in GDP of 0.1 percent next year, before growth picks up to 1.3 percent in 2014.