Economic confidence in the eurozone continued to improve in July, as expected, driven by brightening morale in the bloc’s four largest economies, underpinning Europe’s hopes for a gradual exit from nearly three years of economic downturn.
The single currency area of 17 countries is stuck in the longest recession since records began in 1995 and odds of a swift recovery are limited by record high joblessness and of growth-choking austerity policies.
But in a positive sign, the European Commission said on Tuesday its economic sentiment index rose to 92.5 points in July – its highest since April 2012 – from 91.3 points in June, against market expectations of an improvement to 92.6.
Separately, the eurozone’s business climate index – which measures the phase of the business cycle – improved to -0.53 points in July from -0.67 in June, also the best reading in 15 months.
Confidence improved across all areas except construction, with only one of the eurozone’s five largest economies – the Netherlands – deteriorating by 2.0 points in July, while Germany rose by 0.7 points and France was up by 1.2 points.
The Spanish economy saw sentiment improving in June by 1.2 points to 93.5 points.
A rebound in consumer spending could also help to boost growth alongside exports, seen by the European Central Bank as a key growth driver.
The rise in industry confidence came from sharp improvement of past production, with output expectations and overall order books appraising more positively. [Reuters]