Eurozone Economic Sentiment Rose in August

A survey published by the European Commission revealed that economic sentiment in the Eurozone rose in August for the fourth consecutive month after a record decline stemming from lockdown measures aimed at slowing the spread of Covid-19 in March and April.

And while the monthly index measuring confidence in the economy remained well below pre-crisis levels and its long-term average, it rose to 87.7 from 82.4 in July, above the 85-point average forecast by economists polled by Reuters.

The new improvement, which confirms the economic recovery that began in May, was mostly driven by rising optimism in the services sector, the largest in the 19-nation bloc.

Optimism remained in negative territory, but rose to -17.2 in August from -26.2 in July.

Confidence in the manufacturing and retail sectors also increased, although factory managers’ expectations of production declined after three-month increases pushed them higher than pre-crisis levels.

Consumer confidence registered a slight recovery to -14.7 points from -15.0, confirming an initial estimate published by the commission earlier this month.

The survey revealed that consumer price expectations decreased, with a slight increase in the demand for making large purchases in the next twelve months, and a slight decrease in this large spending now.

The employment outlook index continued to improve for the fourth month in a row, while confidence in the construction sector deteriorated slightly.

Among the bloc’s largest economies, sentiment has improved significantly in France, the Netherlands and Germany. It also increased in Italy, but declined in Spain.