March — MNI analysts survey — February Revised
lowest median highest from
————————————————————————
Econ Sentiment 97.7 96.5 97.7 98.3 95.9 95.9
Industry -10 -11 -11 -10 -13 —
Services +1 na na na +1 —
Consumers -17 -17 -17 -16 -17 —
Retail -6 na na na -8 -9
Construction -25 na na na -28 -29
————————————————————————
Business Climate: -0.32 na na na -0.65 -0.98
FRANKFURT (MNI) – Economic morale in the Eurozone rebounded as
generally expected in March, boosted by ongoing improvement in industry
and construction morale and a recovery in retail confidence, the
European Commission reported on Monday.
As a result, the Commission’s sentiment figure more than fully
retraced February’s small decline, rising to 97.7, its highest level
since June 2008
“After the pause recorded in February, the upward trend appears to
have regained its momentum,” the Commission said. The indicator is
climbing ever closer to its long-term average, but “it will still
require further improvement for the economic activity to reach its
pre-crisis level,” the Commission said.
Among the larger countries, economic sentiment in Germany (+3.4
points) saw the strongest improvement, followed by morale in the
Netherlands (+2.4). Confidence in France and Spain also improved, though
not as strongly (both +1.4).
Confidence within the industrial sector maintained its positive
trend in March, as production expectations and the assessment of order
books continued to gain strength.
The gain in industry morale is consistent with the recent
improvement in the Eurozone manufacturing purchasing managers index
(PMI). In March the PMI rose to 56.3, up 2.1 points, to its highest
level in over three years.
The Commission’s separate Business Climate Indicator recorded a
further rise as well, jumping to its best reading since August 2008 (see
below).
Sentiment in the retailing sector recovered in March after a dip,
while February’s figure was revised modestly upward. Firms polled by the
Commission reported an improvement in both the present and expected
business situation.
However, their intentions to place orders deteriorated modestly in
March, undoing February’s improvement.
Construction sector confidence gained three points in March on the
back of better order books and employment expectations. Respondents,
however, were less optimistic regarding the trend of activity compared
with preceding months.
The service sector also reported that sentiment remained unchanged
on the month, with firms’ assessment of future demand in line with
February’s level.
Late last week, the services PMI was estimated to have risen to
53.7 in March, a 28-month high, thus showing “some welcome signs of
renewed life,” Markit Economics, the firm that conducts the PMI polls,
said.
Though not included in the services component of the ESI, financial
services confidence fell back in March, undoing February’s increase.
Earlier in the month, the Centre for European Economic Research
(ZEW) reported that analysts and market participants had revised down
their expectations of the Eurozone economy in the coming six months,
leaving the sub-index at 37.9, down 2.3 points from February’s level.
Consumer morale was unchanged for the month, with households’
growing pessimism towards the outlook for their financial situation in
the next year offsetting the declining fear in employment expectations.
Nevertheless, households continued to revised downwards their
intentions to make major purchases over the next 12 months, while
revising up their assessment of price trends over the same period.
The upward reassessment of price trends is in line with similar
reassessments in the industry, services and retail sectors, all of which
showed a gain in selling-price expectations.
The Commission’s separate Business Climate Index continued its
climb in March, extending its run of consecutive increases to 12 months
with a reading of -0.32, while its figure for January was revised
upwards.
“The rebound of the indicator suggests that economic activity in
the industry sector will continue to recover in the coming months,
although it has still some way to go to reach its pre-crisis level,” the
Commission said.
The rise in the indicator stemmed from improvements in order books
and production expectations. “(Business managers) were even more
positive about their export order books and production trends observed
in recent months.” However, the Commission added that respondents found
stock levels still lower than desired.
— Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
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