Eurozone Economic Sentiment December 2019


Eurozone: Economic sentiment ticks up in December

January 8, 2020

Sentiment in the Eurozone ticked up in December, although it remained quite downbeat. Economic sentiment rose to 101.5 points from November’s 101.2. Consequently, sentiment in the Eurozone moved further above its long-run average of 100 points.

December’s uptick came on the back of stronger confidence in the construction, services and retail trade sectors. Sentiment among consumers bucked the trend, however, as it saw the only deterioration in December, while confidence in the industrial sector remained virtually unchanged. Employment plans saw notable improvements in the construction and retail trade sectors, while they deteriorated somewhat in the industrial sector and were largely unchanged in the services sector.

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

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

“The service sector is the only game in town for Eurozone growth at the moment. That's been the case for most of 2019 and December proved to be no exception. As weakness in industry continues and according to some measures is even worsening, expectations of negative spillovers to the service sector remain economists' top concern, but so far that hasn't happened. This is quite remarkable given the duration of the decline in industrial production that already started in December 2018.”

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 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, Senior Economist

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Eurozone Economic Sentiment Chart

Euro Area Economic Sentiment December 2019

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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