European Commission’s economic confidence ended its eight month downtrend in November. Economic confidence rose from a downwardly revised 84.3 to 85.7, while the consensus was looking for a stabilization at 84.5. The breakdown shows a significant improvement in industrial confidence (-15.1 from -19.3) and in retail confidence (-14.9 from -17.4), while services sentiment picked up marginally (-11.9 from -12.1). As we already knew from the first release, consumer confidence weakened significantly in November, from -25.7 to -26.9 and also construction sentiment weakened further (-35.9 from -32.9).
The country details show a significant rebound in confidence in Greece (79 from 75.8), Germany (95.6 from 93.3) and France (87.4 from 85.8), while a more moderate pick up was registered in Spain (86.4 from 85.9), Italy (79.4 from 79) and Portugal (72.9 from 72.3). Economic confidence weakened further in Belgium (87.1 from 89.3) and the Netherlands (84 from 87.2). Both the headline figure and the details are encouraging and after the German IFO and euro area manufacturing PMI, suggests that the worst might be behind us, although it should be confirmed in the coming months. While the fourth quarter will remain weak, the euro area economy should start to recover in the course of next year.