Euro Area: Economic sentiment broadly stable in September amid mounting price pressures
Sentiment in the Eurozone inched up to 117.8 in September from all 117.6 in August. The index therefore moved further well above its long-run average of 100. September saw improvements in sentiment in the construction sector. Moreover, consumers grew more confident. However, the retail trade and services sectors recorded deteriorations in confidence, while sentiment in the industry sector remained virtually unchanged. Meanwhile, employment expectations strengthened. Lastly, selling price expectations continued to increase markedly, reaching new all-time highs in the industry and retail sales sectors as well as the highest print since 2008 in the services sector. Moreover, consumer price expectations climbed strongly as well.
In terms of specific countries, sentiment increased the most in Spain, and it also gained strength in Germany and the Netherlands, although it dropped in France and Italy.
Commenting on the releasePeter Vanden Houte, Belgium chief economist at ING, stated:
“Despite the headwinds of supply disruptions, labour market shortages and rising energy prices, eurozone economic sentiment staged a surprise increase in September. However, the coming months might see some softening on the back of higher energy prices.”