Economic confidence in eurozone at two-year high

AFP, Friday 27 Sep 2013

Improved confidence in construction and retail trade sectors brought September Economic Sentiment Indicator to average of 100 for the first time since July 2011

After months in the doldrums, eurozone economic confidence hit a two-year high in September matching other recent signs of improvement, official data said on Friday.

The strong increase "resulted from markedly improved confidence across all business sectors, whereby improvements in construction and retail trade were particularly pronounced," the European Commission said.

The Commission, the EU's executive arm, said its September Economic Sentiment Indicator rose 1.6 points to 96.9 in the 17-nation eurozone and by 2.4 points to 100.4 in the full 28-member European Union.

The sharp increase in the EU brought the indicator above the long-term average of 100 for the first time since July 2011.

"September's increase in economic sentiment adds to mounting evidence that the eurozone economy has left recession behind," said ING Bank analyst Martin van Vliet.

Economic sentiment improved in three of the five biggest euro area economies, whose fragile performance has been a source of concern -- namely Spain (up 2.5 points), Italy (also up 2.5 points) and France (up 1.6).

Sentiment in powerhouse Germany "remained broadly unchanged", the commission said, while it slipped again in the recession-hit Netherlands (down 0.9 points).

Overall, the report fits in with other more encouraging data suggesting the stuttering eurozone may be pulling away from a deep and damaging recession that ended in the second quarter.

On Monday a closely watched survey showed eurozone business activity continued to pick up in September.

But Mario Draghi, head of the European Central Bank, earlier this month said he "remained very cautious" on the strength of any recovery in the eurozone.

Jonathan Loynes, Chief European Economist at Capital economics, said overall the data showed "another sign that the eurozone has continued to grow, but far too slowly to address the region's unemployment and debt problems."

In July, eurozone unemployment remained unchanged at a record 12.1 percent. The unemployment rate was 11 percent across the whole EU.

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