Economic sentiment in Europe improved in June, but the level is still below the lows reached in the previous trough in 1992.
The Economic Sentiment Indicator (ESI), published by the European Commission, increased by 3.2 points in the EU and by 3.1 points in the eurozone, to 71.1 and 73.3 respectively.
The indicator is based on the opinions of representatives of the manufacturing industry, services, retail trade and construction sectors, as well as consumers. Such surveys are conducted regularly to allow comparisons among different countries business cycles and to monitor the evolution of the EU, the eurozone and applicant countries.
In a statement, the European Commission says the overall indicator improved for the third consecutive month. In June, this was mainly because of an improvement in sentiment in sub-sectors such as services, consumers, and industry. Sentiment in construction remained broadly unchanged and retail trade is also described as stable.
Among the largest member states, the statement says that France and Germany (3.2 points) and Britain (2.7 points) recorded the most significant increases. Economic sentiment indicators also improved in Poland (2 points), Spain and the Netherlands (both 1.5 points) and Italy (1.1 points).
The European Commission says the increase observed at sector and country level is driven mainly by improving expectations, as the main economic actors seem to be gaining confidence that the crisis is easing.
Employment expectations have also improved consistently in industry and services, according to the statement. The financial services confidence indicator, which is not included in the ESI, also moved up by 4 points.
Over the past three months, it was managers improved assessment of the business situation that contributed most to the positive development in both regions. However, according to the statement, past and expected demand for their services contributed less.
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