Optimism in the eurozone’s economy brightened more than expected in March, as European consumer confidence showed its strongest monthly jump in nearly five years.
The lift will encourage those in the European Central Bank who have been grappling with sluggish price rises, despite setting the cost of borrowing at close to zero. The ECB meets on April 3 to set its borrowing rate.
The European Commission data on Friday showed that morale across the 18-nation bloc increased to 102.4 from February’s level of 101.2, exceeding market expectations of 101.4.
The data means that consumer confidence has improved sharply this year to swing above its long term-average for the first time since July 2011.
Sentiment in March in the Netherlands jumped by 2.3 to 100.3, followed by a 2.2 improvement in Spain. Italy rose by 1.3, France by 0.7. Morale in Germany, Europe’s strongest economy, brightened by 0.4.
The lift in consumer confidence outstripped industry.
The European Commission said that increases in services and retail trade confidence were comparatively modest and industry and construction sentiment remained broadly unchanged compared to February.
“Consumer confidence was particularly buoyant, registering the sharpest monthly increase since April 2009,” the European Commission said.
“Consumers’ views on the future general economic situation and the level of future unemployment, as well as their savings expectations improved sharply,” it added.
The bloc’s unemployment, however, remains close to record highs at 12 percent. Job creation in the final three months of last year, however, rose for the first time in nearly three years.
While employment plans were revised upwards in retail trade and construction, they remained virtually unchanged in industry and services. Manufacturers’ expected selling prices, by contrast, declined across the board.
The business climate in the 9.5 trillion euro economy was broadly unchanged at 0.39 in March, compared with 0.36 in February, data showed. Analysts polled by Reuters saw the reading at 0.40 in March.
The Commission said managers’ predictions of production output improved, although their order books were less full. [Reuters]