Source: Sharecast
The EC’s economic sentiment indicator rose to 98.4 from 97.1 in July, beating consensus expectations for a reading of 97.5.
Meanwhile, the economic sentiment indicator for the EU ticked up one point to 98.2 this month.
The European Commission said the improvement in sentiment was driven by higher confidence in industry, services and retail trade, while confidence in construction and among consumers was broadly stable.
Among individual countries, the ESI improved by 2.3 points in France, 1.3 points in Germany and 0.8 in Italy. The indicator for the Netherlands dipped 0.1 point, while Poland and Spain saw declines of 0.5 and 2.2, respectively.
ING economist Bert Colijn said: "Despite ongoing concerns in Europe about the impact of climate and the continued war in the Middle East, economic sentiment actually soared compared to July. Both businesses and consumers were more optimistic about current and future economic conditions. Despite risks looming large, sentiment has now seen a clear two-month uptick with the overall economic sentiment indicator posting the highest reading since January.
"Industry was more upbeat about expectations, although recent production did disappoint compared to July. The service sector actually became somewhat more upbeat about both recent activity and future demand. After some weakness in recent months, this comes as a relief from the largest sector of the economy.
"Selling price expectations ticked down for industry, but increased a little for services. For the industrial sector, in particular, this is interesting as higher oil prices have put pressure on input costs again. But in line with the PMI which was out late last week, core inflationary pressures do seem to remain quite soft for the moment. And while that takes away some immediate pressure from the ECB, we do still expect a September hike.
"All in all, the eurozone economy seems to be doing okay despite everything that’s going on. We do expect negative impact from the summer droughts and higher oil prices for growth in the third quarter, but underlying momentum remains decent. That is quite a hopeful note amidst unabating global turmoil."