April — MNI analysts survey — March Revised
lowest median highest from
————————————————————————
Econ Sentiment 100.6 98.5 99.1 99.8 97.9 97.7
Industry -7 -8 -8 -7 -10 —
Services +5 na na na +1 —
Consumers -15 -17 -15.5 -15 -17 —
Retail -1 na na na -6 —
Construction -25 na na na -25 —
————————————————————————
Business Climate: +0.23 na na na -0.2 -0.32
FRANKFURT (MNI) – Economic morale in the Eurozone maintained its
recovery in April, surprising to the upside and exceeding the long-term
average, with gains in every component except construction, the European
Commission reported on Thursday.
The Commission’s sentiment indicator rose to 100.6 points, its
highest level since March 2008.
“However, coming out of a deep recession clearly means that further
sustained improvements will be required for economic activity to reach
its pre-crisis levels,” the Commission warned in its press release.
Germany registered the strongest improvement (+4.3) among the
larger Eurozone states, followed by France (+2.0), Italy (+1.5) and
Spain (+1.1).
Industry sentiment gained three points in April, rising above its
long-term average. The boost came from improvements in order book
assessments, as well as a notable jump in production trends. Firms
polled also highlighted an upward revision in selling-price
expectations, with the indicator matching the series average.
The rise in industry morale reflects the jump in sentiment
indicators, including the manufacturing purchasing managers index (PMI),
which rose to a 46-month high of 57.5 in April.
“Manufacturers are showing the best performance for ten years, with
the PMI signalling near-double-digit annual growth,” Markit chief
economist Chris Williamson said.
Looking ahead, manufacturers once again revised upwards their
estimates regarding the number of months of production based on orders
on hand. However, at 3.0 months in 2Q, estimates still remain below the
long-term average of 3.1.
The gain in confidence was echoed in the rise in the business
climate index, which hit its highest level since May 2008 (see below).
In the services sector, firms’ optimism continued to grow, as they
became more positive regarding demand trends and employment expectations
over the next three months.
The services PMI rose in April, to a 30-month high of 55.5. “The
recovery is also gaining momentum in services,” Markit’s Williamson
said.
While not part of the services component, financial services morale
saw a significant jump, as firms grew more optimistic regarding the
coming quarter.
Earlier this month, analysts polled by the Centre for European
Economic Research (ZEW) reported growing confidence in both the current
economic situation of the Eurozone and the outlook over the next six
months.
Boosted by a decline in jobless worries over the next year, as well
as greater confidence in the current situation regarding the general
economy, consumer sentiment rose modestly.
However, households’ pessimism about their own financial situation,
as well as their expectations for the overall economy, remained
unchanged, partially offsetting the effects of falling labour concerns.
In the retailing sector, pessimism continued to decline, with fewer
firms viewing the current business situation as below normal and more of
them revising up their business expectations for the short term.
Employment expectations in the sector also improved, though they remain
slightly above the long-run average.
Bucking the trend was sentiment in the construction sector, which
remained unchanged in April, interrupting two consecutive months of
increases.
Construction companies reported the activity trends compared to
previous months showed some improvement. Firms also revised up their
price expectations. However, offsetting this were order book
assessments, which slipped in April, partially negating March’s rise.
The Commission’s separate Business Climate Indicator maintained its
climb in April, rising to its highest level in almost two years, while
March’s figure was revised upwards.
“The rebound of the indicator suggests that economic activity in
industry 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.
According to respondents, better order books and production trends
helped to lift optimism in the business sector. Furthermore, stocks were
below desired levels and continue to fall, they added.
— Frankfurt bureau tel.: +49-69-720142. Email: frankfurt@marketnews.com
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