BRUSSELS: Europe's Economic Sentiment Indicator (ESI) showed an upward trend in February in both the European Union (EU) and the euro area, increasing by 1.4 points to 107.2 and by 1 point to 107.8 respectively, the EU said Thursday.
According to an EU report, significant rise in sentiment in services was the main driver of the improvement, but confidence in industry and construction also contributed to the overall improvement, as well as confidence among euro area consumers.
Most Member States recorded an improvement in sentiment, and among the seven largest Member States, Poland (+3.6 points) and the UK (+3.1 points) reported the most significant increase, followed by Spain (+2.2), Germany (+1.3) and the Netherlands (+1 point). Only France (-0.4) and Italy (-0.5) reported a fall.
With the latest numbers, the ESI is now above its long-term average in six out of the seven largest Member States, with Spain still catching up.
Sentiment in industry increased further by 1.1 points in the EU and by 0.4 point in the euro area. The gain in confidence in this sector reflects sizeable improvements in both (domestic) order books and export order books. Managers were also optimistic about their production expectations and employment expectations.
Services had a significant rise in both the EU (+3.6) and the euro area (+1.2). According to the report, managers were especially enthusiastic about the evolution of demand observed in the past months, while they were more cautious about expected demand.
In addition, sentiment in construction increased significantly as well, both in the EU and the euro area (+2.1 and +1.7, respectively), although the indicator remains at very low levels in both regions. The retail sector, meanwhile, weakened substantially in the EU (-2.8) but improved marginally in the euro area (+0.4).
Confidence among consumers improved significantly in the euro area (+1.2), while it remained stable in the EU, mainly because of a deterioration in UK consumers' assessment of the general economic situation and unemployment fears.
In both regions, managers in industry and services signaled a significant increase in their selling price expectations, while households also reported a rise in their assessment of past and future price trends.
(BNO NEWS )