Euro zone sentiment recovers for fourth straight month in August

FILE PHOTO: A steel worker of Germany's industrial conglomerate ThyssenKrupp AG stands a mid of emitting sparks of raw iron from a blast furnace at Germany's largest steel factory in Duisburg

BRUSSELS (Reuters) – Euro zone’s economic sentiment grew in August for the fourth consecutive month after a record slump caused by COVID-19 lockdowns in March and April, a survey released on Friday by the European Commission showed.

While remaining well below pre-crisis levels and the long-term average, the monthly indicator which gauges confidence in the economy soared to 87.7 points from 82.4 in July, above the 85.0 point average forecast of economists polled by Reuters.

The new pick-up, confirming the gradual rebound from May, was driven mostly by higher optimism in the service sector, the largest in the 19-country currency bloc. It remains in negative territory, but rose to -17.2 in August from -26.2 in July.

Confidence also rose in the industry and retail trade sectors, although factory managers’ production expectations edged down after three consecutive monthly increases that pulled them to above pre-crisis levels.

Consumer confidence posted a slight recovery to -14.7 points from -15.0, confirming preliminary estimates released by the Commission earlier in August.

Consumer price expectations edged down, with a slightly higher appetite for major purchases in the coming twelve months, and a slight reduction in such major spending for now, the survey showed.

The employment expectations indicator continued to improve for the fourth month running, while confidence in the construction sector slightly worsened.

Among the bloc’s largest economies, sentiment improved markedly in France, the Netherlands and Germany. It also rose in Italy, but it fell in Spain.

(Reporting by Francesco Guarascio @fraguarascio; editing by Philip Blenkinsop)

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