Eurozone: Economic sentiment in October hits highest level since December

Economic sentiment in the Eurozone rose in October, according to the European Commission (EC). The economic sentiment index (ESI) increased from 104.9 in September to 106.3, the highest reading since December 2015. The result overshot market analysts’ expectations of a small decrease to 104.8. Despite the Brexit vote, economic sentiment has remained resilient in the Euro area.

Looking at the sectors of the economy, economic sentiment rose strongly in the services sector. Sentiment also increased in the manufacturing and construction sectors but was broadly stable among consumers and in retail trade.

At a country level, sentiment improved in twelve countries including Italy, Germany and Spain. In contrast, sentiment deteriorated in the remaining countries including in France.

FocusEconomics Consensus Forecast panelists see private consumption growing 1.6% in 2016, which is down 0.1 percentage points from last month’s projection. For 2017, panelists see consumption expanding 1.4%, which is unchanged from the previous month’s forecast. Panelists expect investment to grow 2.3% in 2016, which is down 0.3 percentage points from last month’s forecast. In 2017, panelists see investment increasing 2.1%, which is down 0.1 percentage points from last month’s projection.