Eurozone economic confidence rose sharply in April to the pre-pandemic level for the first time since the outbreak of Covid-19, survey results from the European Commission showed on Thursday.
The economic confidence index climbed to 110.3 from 100.9 in March. The score was well above economists' forecast of 102.2 and reached its highest level since September 2018.
Although the surveys have been too optimistic about activity in the first quarter, the seems to have started the second quarter on a somewhat stronger footing than anticipated, Jessica Hinds, an economist at Capital Economics, said.
All surveyed business sectors showed improvements in sentiment. Confidence among consumers also strengthened in April.
The industrial confidence index advanced to a record 10.7 from 2.1 in March. Economists had forecast the index to rise moderately to 4.0.
The improvement in industrial sentiment was driven by managers' production expectations, their assessments of the current level of overall order books and of the stocks of finished products.
The services sentiment indicator came in at 2.1, up from -9.6 in the previous month. The reading was expected to rise to -8.7.
This was the second significant improvement in a row, driven by managers' more optimistic demand expectations, as well as more positive views on the past business situation and past demand.
The consumer confidence index climbed to -8.1 from -10.8 a month ago. The score matched the flash estimate.
The retail trade confidence index climbed to -3.1 from -12.2 a month ago. The rise reflected managers' improved assessments of the past and the expected business situation and, to a lesser extent, the adequacy of the volume of stocks.
The construction confidence index advanced to 2.9 in April, as managers posted better appraisals of the level of order books and, particularly, more optimistic employment expectations.
The employment expectations indicator exceeded its long-term average for the first time since February 2020. The improvement was driven by more optimistic employment plans in all surveyed business sectors, namely industry, services, retail trade and construction.
Selling price expectations increased markedly in all surveyed business sectors in April. Consumer price expectations increased only mildly.
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