RTTNews - Eurozone economic sentiment rose more than expected to hit a ten-month high in August as all sub-indicators recorded improvements except retail trade.
Rising for the fifth consecutive month, the economic sentiment indicator climbed to 80.6 in August from 76 in July, results of the latest business and consumer survey conducted by the European Commission showed Friday. Economists had expected a reading of 78.
In the next few months, the indicator will continue to approach 100, irrespective of how strong the upswing actually proves, Commerzbank analyst Christoph Weil said.
The consumer confidence index rose to minus 22 from July's minus 23 and the industrial confidence indicator climbed to minus 26 from minus 30. A gauge for confidence in the services sector improved to minus 11 in August from minus 18 in July and that for the construction sector moved to minus 32 from minus 33.
At the same time, indicating lingering sluggishness in households' demand, the confidence indicator for the retail sector dropped to minus 14 from minus 13.
A separate survey from the European Commission showed that the business climate indicator for the euro area stood at minus 2.21, better than a revised minus 2.70 recorded in July. It came stronger than the expected reading of minus 2.50 and suggests that year-on-year industrial production growth would be negative in July and will remain subdued in August.
However, a stronger-than-expected recovery in industrial new orders in June indicate that the decline in industrial output is likely to ease in the coming months.
Results of the recent confidence surveys suggest that recession is abating in the 16-nation economy. The Ifo business climate indicator for the German industry and trade improved for the fifth straight month in August. German GfK consumer sentiment also brightened in August. In Italy, consumer confidence climbed to the highest level since March 2007.
Germany and France exited recession in the second quarter on massive economic stimulus measures and loose monetary policy, but the single currency bloc continued to contract.
European Central Bank President Jean-Claude Trichet said he saw some signs confirming the notion that the real economy is starting to get out of the previous free fall.
Economic sentiment indicator for the EU also rose for the fifth month in August to hit 80.9, the highest reading since September last year. The confidence indicator rose from 75 in July.
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