Euro Area: Economic sentiment falls amid renewed restrictions in November
Sentiment in the Eurozone fell to 87.6 points in November from 91.1 points in October, amid the reimposition of measures to combat the second wave of Covid-19. The index therefore remained deeply entrenched below its long-run average of 100 points. November saw a considerable deterioration in sentiment in the services and retail trade sectors. Moreover, financial services confidence posted a sharp drop. Additionally, sentiment in the industry and construction sectors as well as among consumers weakened, albeit to a lesser extent. Meanwhile, employment expectations turned more negative.
In terms of specific countries, sentiment dropped in France, the Netherlands and Spain, although it increased in Germany and Italy.
Commenting on the release, Bert Colijn, senior Eurozone economist at ING, stated:
“The fourth quarter will be negative again but the first quarter of next year will probably see some modest recovery as measures are gradually lifted and vaccine developments will boost prospects of a bounce back. Judging from this survey, businesses and consumers seem more worried about the short-term for now.”