Eurozone economic and business confidence strengthened to the highest level in more than five years in December, shrugging off political uncertainties from the 'Brexit' vote and national elections in member countries in 2017.
The economic sentiment index improved to 107.8 in December from 106.6 in November, survey results from the European Commission showed Friday.
This was the highest level since March 2011, when the reading was 108.3 and also above the expected level of 106.8.
The industrial sentiment index turned positive in December, to 0.1 from -1.1 in the previous month. The reading was forecast to remain at negative 0.4.
The improvement in industrial confidence resulted from a marked increase in managers' production expectations and improved assessments of overall order books and the stocks of finished products.
At the same time, the services confidence index climbed to 12.9 from 12.2 a month ago. Improvements in services confidence resulted largely from managers' significantly better assessment of the past business situation.
The consumer sentiment index came in at -5.1, in line with flash estimate, versus -6.2 in November.
Confidence brightened markedly thanks to consumers' significantly improved expectations regarding future unemployment and more positive views on the future general economic situation.
Similarly, the retail trade sentiment more than doubled to 3.2 from 1.5 in the previous month. The strong increase in confidence was fueled by significantly brighter views on the present business situation and a slightly more positive assessment of the volume of stocks.
Continued growth in construction confidence was attributable to managers' significantly higher employment expectations. The corresponding index rose to -12 from -12.8 in November.
The business confidence index rose to 0.79, the highest since June 2011, from 0.41 in November.
Managers' assessments of the past production improved sharply, and to a lesser extent, their views on the future production, overall and export order books and the stocks of finished products.
Robust consumer and business confidence in December boosts hopes that the Eurozone economy will see a decent start to 2017 after GDP growth highly likely picked up in the fourth quarter of 2016, IHS Markit Economist Howard Archer said.
Nonetheless, Archer said it is also highly possible that the United Kingdom's Brexit vote will impact more significantly on Eurozone confidence and activity in 2017 as the UK triggers Article 50.
Elsewhere, a report from Eurostat showed that retail sales volume fell a seasonally adjusted 0.4 percent month-over-month in November, reversing a revised 1.4 percent rise in October.
Sales of food, drinks and tobacco products dropped 0.4 percent and those of non-food products, except fuel shrank 0.9 percent.
On a yearly basis, retail sales growth eased to 2.3 percent in November from 3.0 percent in the prior month. However, growth was above the 1.9 percent climb economists had expected.
by RTT Staff Writer
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