By Marco Babic
ZURICH (MaceNews) – Economic sentiment in the euro area fell in November for the first time since April when the effects of the first COVID-19 wave pushed sentiment sharply lower.
The Economic Sentiment Index (ESI) for the countries sharing the euro fell “markedly” in November to 87.6 from 91.1 the previous month, according to a report release by the European Commission. Still, the decline was not as sharp as had been expected by economists, with the median forecast of an Econoday survey of 86.5.
“In the euro area, the ESI’s decline was fuelled by diving confidence in retail trade, services and among consumers. Sentiment in industry and construction held up rather well, posting comparatively mild deterioration,” the Commission said.
Among the major economies, Italy showed the largest decline, down 8.7 points to 81.5 followed by a 4.8 point drop in France to 86.9. Germany and Spain saw more modest declines in sentiment, down 2.8 and 2.0 points to 94.2 and 86.9, respectively.
Industrial confidence which had steadily been improving to pre-COVID levels also fell in November for the first time in six months. The index fell 0.9 points to -10.1 compared to a reading of -6.2 in February.
“Managers’ appraisals of the stocks of finished products and the current level of overall order books continued improving, but, in the latter case, at a slower pace than in October. At the same time, the deterioration of managers’ production expectations intensified compared to last month,” the report said.
Consumer sentiment fell in November to -17.6 from -15.5 in the prior month, which was the second monthly decline, reflecting “growing concerns about the expected general economic situation and their expected financial situation, which were matched by more cautious intentions to make major purchases”. Employment expectations also fell for the second month in a row, down 3.3 points to 86.9 from 89.9 showing “scaled back employment expectations in retail trade, as well as moderately lower ones in services and construction. Industry managers stood out with slightly more optimistic employment expectations”, the report said.
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