Eurozone Economic Sentiment January 2020


Eurozone: Economic sentiment starts 2020 on a positive note

January 30, 2020

Sentiment in the Eurozone strengthened in January, although it remained quite downbeat. Economic sentiment rose to 102.8 points from December’s 101.3 points. Consequently, sentiment in the Eurozone moved further above its long-run average of 100 points.

January’s uptick came on the back of stronger confidence in the industrial and construction sectors. On the flip side, sentiment in the retail trade sector weakened, and confidence in the services sector dipped, albeit only in small measure. Meanwhile, sentiment among consumers remained unchanged. Employment plans saw notable improvements in the industrial sector, while they were largely unchanged in the construction, retail trade and services sectors.

Among the largest economies of the Euro Area, sentiment strengthened in Germany and France, while it dipped in the Netherlands and, to a greater extent, in Spain.

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

“While the first quarter will not see a sudden revival of growth, signs of recovery are becoming more apparent, which means that the manufacturing recession that the eurozone is currently in can be expected to end in the months ahead. That should lead to a subdued uptick in growth, even though downside risks to the growth outlook like the coronavirus could prolong the sluggish eurozone growth environment a bit more.”

FocusEconomics Consensus Forecast panelists see private consumption growing 1.2% in 2020, which is unchanged from last month’s projection. For 2021, panelists also see consumption also expanding 1.2%. Panelists expect investment to grow 1.4% in 2020, which is unchanged from last month’s forecast. In 2021, panelists see investment increasing 1.6%.

Author: Massimo Bassetti, Economist

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Eurozone Economic Sentiment Chart

Euro Area Economic Sentiment January 20 20

Note: The Economic Sentiment Indicator (ESI) is based on surveys addressed to the manufacturing, services, retail trade and construction sectors, as well as to consumers. Values above 100 indicate an above-average economic sentiment, whereas values below 100 indicate a below-average position.
Source: European Commission

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