Both the Eurozone Business Climate Indicator and
Economic sentiment indicator rose slightly in February according to the European
In February 2014 the Business Climate Indicator (BCI) for the
Eurozone increased slightly by 0.12 points to +0.37. Managers' appraisal of the
past production, the stocks of finished products as well as the current level of
overall order books and export order books marked an improvement; production
expectations were virtually unchanged.
The BCI is based on a factor analysis of the Eurozone aggregate balances
(seasonally adjusted) of five of the monthly questions in the industry survey
(only employment and selling-price expectations are excluded).
In the Eurozone, the Economic Sentiment Indicator's (ESI) marginal
increase was due to enhanced confidence in construction and, to a lesser extent,
services, retail trade and industry; at the same time, confidence among
consumers worsened. Sentiment booked improvements in three out of the five
largest Eurozone economies, i.e. Germany (+0.4), the Netherlands (+0.6) and,
especially, Italy (+2.4), while it remained stable in Spain and deteriorated in
Industry confidence registered a small
improvement (+0.4), backed by managers' slightly more optimistic assessment of
the stocks of finished products and the current level of overall order books;
their production expectations were virtually unchanged. Managers' assessments of
the past production and the current level of export order books, which are not
included in the confidence indicator, marked an improvement. The increase
in services confidence (+0.8) resulted from managers' more positive assessment
of past demand and the past business situation, while their appraisal
of expected demand remained broadly stable. Consumer confidence deteriorated
(-1.0) as a result of worsened expectations about savings, unemployment and
the future general economic situation.
Consumers' views on the future financial
situation of their households remained broadly flat. Retail trade
confidence booked a moderate improvement (+0.5) driven by managers' more
positive evaluation of the present business situation, partially offset by less
positive business expectations; managers' appraisal of the volume of
stocks remained broadly unchanged. Confidence in the construction sector went up
(+1.3), resulting from managers' markedly improved assessment of order
books coupled with a downward revision of employment expectations. Financial
services confidence (not included in the ESI) decreased by 2.5 points. While the
assessment of the past business situation and past demand worsened, demand
expectations were assessed more positively.
While employment plans were revised upwards in
services, they remained virtually unchanged in industry and worsened in retail
trade and construction. Selling price expectations rose in services and
construction but decreased in retail trade and industry. Also consumers' price
expectations were revised downward.
As in the Eurozone, the headline indicator for
the wider EU was broadly unchanged (+0.2). Concerning the two largest
non-Eurozone EU economies, the ESI improved in the UK (+1.0) and remained
broadly stable in Poland (+0.3).
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