Economic Sentiment rises marginally in both euro area and EU, remains at highest since 2007

Despite heightened uncertainty about future policies ahead of a series of key elections across the currency area, data released earlier on Monday by the European Commission showed that the economic sentiment remained broadly unchanged in both the euro area and the European Union.

The Economic Sentiment Indicator (ESI) for the euro area rose +0.1 points to 108.0, while for the EU the index was up +0.3 points to 108.9, reaching its highest level since March 2011. Data suggested the eurozone economy has gained some fresh momentum during the first months of 2017, defying economists' expectation for sentiment to weaken.

Details of the report showed rise in sentiment in the industry, services and construction sector was offset by lower consumer and retail trade confidence. Industry sector confidence rose +0.5, while services confidence was up +1.0 points. Consumer confidence fell -1.4 points and retail trade confidence fell -0.4 points.

Employment plans saw a significant upward revision in construction and smaller increases in services and retail trade, while employment plans remained broadly unchanged in industry. Selling price expectations increased markedly in retail trade and construction and, to a somewhat lesser extent, in industry, while they remained broadly unchanged in services. Also consumer price expectations remained unchanged in February.

The rise in business confidence follows the release last week of a measure of activity in the private sector, based on surveys of purchasing managers, which suggested that the eurozone economy has accelerated in the early part of this year.