Euro-Area Confidence Rises to Strongest Since Pandemic Started
(Bloomberg) -- Confidence in the euro-area economy improved sharply in March, reaching levels last recorded before the pandemic, as companies and consumers see vaccine roll-outs eventually helping support a recovery.
A European Commission sentiment index increased to 101.0, exceeding all estimates in a Bloomberg survey. Sentiment rose across all sectors of the economy and particularly strongly in Germany, the region’s largest member. Employment expectations jumped.
The data add to evidence that businesses and consumers are turning the page on a difficult start to the year. While slow vaccinations and extended lockdowns have repeatedly pushed the region’s recovery further out into 2021 and economists are warning that the latest curbs warrant caution, the prospect of generous support are underpinning confidence.
Europe’s 750 billion-euro ($881 billion) recovery fund is likely to provide the economy with a boost in the second half, and the European Central Bank has promised to ensure companies and households get the financing they need at favorable terms.
In March, confidence in industry increased for a fourth month, with an assessment of inventories approaching historical levels of scarcity. Sentiment in services staged its first strong pick-up since September, driven by managers’ much more optimistic
Consumers also turned more optimistic as expectations for the economy and their personal situation improved. A gauge for households’ intention to make major purchases registered its second-largest gain on record.
Analysts surveyed by Bloomberg estimate the euro-area economy shrunk 1% in the three months through March amid strict coronavirus lockdowns, and will expand by around 2% in each of the following two quarters.
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