Euro Area: Economic sentiment soars in March

Euro Area Economic Sentiment March 2021

Euro Area: Economic sentiment soars in March

Sentiment in the Eurozone jumped to 101.0 in March from 93.4 in February, marking the strongest reading in one year and beating market expectations of 96.0. The index therefore moved above its long-run average of 100 for the first time since the outbreak of the Covid-19 pandemic. March saw substantial improvements across the board: sentiment in the services, industry, retail, construction and financial services sectors increased considerably. That said, confidence in the services sector grew the most. Moreover, employment expectations strengthened markedly. Lastly, selling price expectations surged in all sectors and consumer price expectations also increased.

In terms of specific countries, sentiment rose the most in Germany, where it returned above its long-term average, and it also gained considerable strength in France, Italy, the Netherlands and Spain.

Commenting on the release, Bert Colijn, senior Eurozone economist at ING, stated:

“The figures might paint the economic situation slightly rosier than it is, as the survey was done in the first half of the month before some countries announced more tightening of lockdown measures. But that doesn’t take away the fact that forward-looking indicators point to a growth pick-up in the second quarter, after a still shaky first quarter.”

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