William Malcolm

Eurozone Economic Sentiment Hits Three-Year High In May

The economic sentiment in the European Union improved again in May, its main indicator rising to 113.9 points from April’s 109.9 points. This was announced today by the European Commission (EC). The index is significantly above its long-term average and is close to the maximum from December 2017. For the euro area, the indicator rose to 114.5 from the April value of 110.5 points. In the Czech Republic, the index also rose, but is significantly below the value for the entire union.

The eurozone mood index exceeded analysts’ estimates in a Reuters poll. They expected the indicator to rise to 112.1 points.

The increase in mood in the EU was mainly due to the improved situation in the dominant services sector, which was significantly affected by the pandemic and the associated restrictions. However, the situation also improved in all other sectors monitored, such as industry, retail and construction, as well as among consumers. The indicator has improved significantly in all six largest economies, most notably in Italy. It is followed by Poland, France, the Netherlands, Germany and the last of these six by Spain.

The Commission stated that the expected employment development indicator also increased significantly. It rose to 110.3 points in the EU from 107.9 points and to 110.1 points in the euro area from 107.2 points in April. Even in this case, both indicators are above their long-term average.