Euro Area: Economic improves in October despite supply shortages and surging price pressures
Sentiment in the Eurozone rose to 118.6 in October from 117.8 in September. The index therefore reached the second highest reading ever and moved further above its long-run average of 100. October saw improvements in sentiment in the construction, industry, services and retail trade sectors. Moreover, employment expectations strengthened. On the flipside, consumers grew less confident. Moreover, selling price expectations continued to increase markedly, reaching a new all-time high, while consumer price expectations climbed to the highest reading since November 1992.
In terms of specific countries, sentiment increased the most in Spain, and it also gained strength in France, Italy and the Netherlands, although it dropped in Germany.
Commenting on the release, Bert Colijn, senior Eurozone economist at ING, stated:
“Sentiment […] is close to historic highs, while the PMI is levelling off. We believe that the growth path is clearly one of normalisation and think that the level of the PMI is likely to best portray the current environment: one of moderating GDP growth after a reopening boom earlier in the year.”