Confidence in EU economy at all-time highs in July

Confidence in EU economy at all-time highs in July

EU economy chief Paolo Gentiloni told the Financial Times in an interview this week that the recovery was proceeding “at speed” due to high vaccination rates, despite the threat of the Delta Covid variant.

The data, which measures confidence in the industry, services, consumer, retail and construction sectors, reached 118 points in July in the EU and 119 in the 19-member euro zone, up by 0.9 and 1.1 points, respectively, and far above the average level of 100.

However, the European Commission’s Economic Sentiment Indicator, published on Thursday, said that more upbeat economic assessments may have reached their limits.

“Compared to the last months, the latest improvement was much weaker, suggesting that the indicator is approaching its peak,” the survey said.

EU economy chief Paolo Gentiloni told the Financial Times in an interview this week that the recovery was proceeding “at speed” due to high vaccination rates, despite the threat of the Delta Covid variant.

The EU and eurozone indicators are at their highest levels since surveys began in 1985, following a low of 67.1 in April 2020 for the EU and 67.6 in March 2009 for the euro countries.

The sentiment boost was driven by improving confidence in industry and services.

Industry confidence was up for the eighth month in a row, but while managers’ assessments of their order books were high, they said stocks were scarcer than ever.

And while services confidence was up 1.3 points, matching a previous high reached in August 2007, managers were more positive about past than future demand.

Meanwhile, the the construction sector and consumers were more downbeat about the future.

Consumer confidence was down 1.1 points after rising for five months in a row on the back of worries about the economic situation, financial conditions and their plans for major purchases.

Consumers were also slightly more worried about potential unemployment in July.

Construction confidence fell by 0.8 points due largely due to downbeat employment expectations.

And after four significant rises, retail confidence stayed virtually flat, recording the lowest reading ever about the volume of stocks.

France saw the largest monthly jump in confidence (up 4 points), although firms and consumers in Sweden, Austria, Belgium, Italy and Luxembourg were the most upbeat overall, scoring above the EU and eurozone averages.

But confidence was well below the EU average in Czechia, Slovakia, Bulgaria, Cyprus and Latvia.

Ireland registered a score of 113.9 in July, below the all-time high of 117.5 reached in March 2000.

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