EC survey strengthens, but still points to slow growth

September's EC business and consumer survey suggests that the economic recovery maintained its pace in Q3. But growth was still fairly slow, therefore, the ECB is expected to increase its stimulus to provide a further boost to the economy.

The rise in the euro-zone Economic Sentiment Indicator (ESI) from 104.2 in August to 105.6 pushed the quarterly average up from 103.7 in Q2 to 104.6 in Q3 - its highest since Q2 2011. At this level, the ESI points to annual GDP growth picking up from 1.5% in Q2 to less than 2.0% in Q3. This would imply little change in the quarterly rate of GDP growth of 0.4%, says Capital Economics in a research report.

Sentiment rose in the industrial sector to its highest level since July 2011. However, it remained at a level consistent with barely positive annual output growth. Similarly, the export orders index suggests that the weakening of the euro has had little effect on export volumes of the euro area.