Feb — MNI analysts survey — Jan Revised From
lowest median highest
————————————————————————
Econ Sentiment 107.8 106.1 107.0 107.5 106.8 106.5
Industry 6.5 6.0 7.0 8.0 6.1 6.0
Services 11.1 9.0 9.5 10.0 9.9 9.2
Consumers -10.0 -12.0 -10.0 -9.8 -11.2 —
Retail -0.2 na na na -0.6 0.1
Construction -24.3 na na na -26.0 —
————————————————————————
Business Climate: +1.45 1.60 1.65 1.70 +1.45 +1.58

PARIS (MNI) – Economic morale in the Eurozone recovered more than
expected in February, with improvements in all main sectors, the
European Commission said Thursday.

After a 0.1-point dip in January — the first decline in two years
apart from the series revision in May — the Commission’s sentiment
indicator bounced back a full point in February, surpassing analysts’
forecasts. Along with other leading indicators this month, this points
to solid growth in 1Q.

Among the larger economies, monthly sentiment gains were led by
Spain (+2.2 points), Germany (+1.3 pts) and the Netherlands (+1 pt),
while France (-0.4 pt) and Italy (-0.5 pt) reported a fall. Only in
Spain is the index still below average.

While industry had been leading the recovery in morale, the 0.4
point monthly rise was the weakest after the retail sector. The gain
reflected sizeable improvements in both domestic and export order books.
Managers were also optimistic about their production and employment
prospects.

The Commission’s separate Business Climate Indicator stabilized in
February after seven months of gains. Improvements in order books and
production expectations were offset by a decline in managers’ assessment
of recent production and an increase in their appraisal of stocks of
finished goods.

Still, at a level very close to historical peaks, the indicator
suggests “that the recovery in industry will continue in the coming
months,” the Commission said.

The services component rose 1.2 points, reflecting improved
assessments of recent demand and especially near-term prospects.
Confidence in financial services, which is not included in the overall
sentiment index, gained 3.8 points on the back of expectations for a
recovery in demand and hiring in the coming months.

The Commission’s flash estimate for consumer sentiment was revised
down by 0.1 point to show a 1.2-point monthly upturn in February. While
inflation expectations jumped sharply and jobless fears edged higher,
consumers expected the overall economy and their personal financial
situation to improve over the coming year. The outlook for major
purchases also brightened, but was still not much above September’s
historical low.

The retail sentiment index recovered marginally after a steep
setback in January on the back of brighter assessments of recent
business and future prospects.

Construction morale recovered as well, reflecting a recovery in
orders and especially recent activity.

Sales prices expectations rose sharply in all sectors, led by
retail and construction. The outlook in manufacturing was only 2.7
points below the all-time high hit in February 1997.

Employment prospects improved in all sectors except for
construction.

–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com

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