Economic Sentiment Indicator shows rise in confidence levels

Investors who regularly make money transfers in the eurozone may be interested to hear positivity in the region has risen for the first time since March 2011.

The latest figures from the European Commission's (EC's) Economic Sentiment Indicator show the index rose 1.2 points in the European Union (EU) and 0.6 per cent in the euro area.

This improvement is understood to have mainly been driven by increasing confidence in the services sector, as well as among consumers and in the construction industry.

Germany and Spain noted a rise in sentiment of +2.3 and +1.8 respectively among the largest euro area member states.

Meanwhile, the UK and Poland both noted increases of +5.0 and +2.7 respectively in the rest of the EU.

However, deteriorations occurred in France (-2.1), Italy (-1.1) and the Netherlands (-1.0).

Confidence in services returned to highs in both the EU and euro area at +2.9 and +2.0 thanks to positive assessments of past demand, expected demand and past business situations.

Elsewhere, the construction sector also noted improved confidence in the EU (+1.2) and euro area (+0.6), which is reported to have been due to a reduction in unemployment fears in both regions.

Despite this, confidence in industry rose only marginally in the former to +0.4, while it remained unchanged in the euro area.

Expected production and the current level of order books helped boost the EU figures, but this was limited by the worsening in the assessment of stocks of finished products.

Other sectors where improvements were noted included among consumers and in financial services, which saw a rise of in the EU and euro area of +1.3 and +0.6, as well as +6.0 and +9.1 respectively.

Elsewhere, the European Commission recently reported the Business Climate Indicator for the euro area rose for the second month in a row in January.

Posted by Chris Barber

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