Eurozone business climate indicator rose sharply in February

According to the report from European Commission, in February 2020, the Economic Sentiment Indicator (ESI) increased in both the euro area (by 0.9 points to 103.5) and the EU (by 0.5 points to 103.0). The Employment Expectations Indicator (EEI) eased mildly in the euro area (by 0.3 points to 105.0) and the EU (by 0.6 points to 104.5).

The improvement of euro-area sentiment resulted from higher confidence among consumers and, to a lesser extent, industry managers, while sentiment in services, retail trade and construction remained virtually unchanged.

Industry confidence posted the second monthly increase in a row (+0.9). While managers' production expectations and views on the stocks of finished products remained largely flat, their appraisals of the current level of overall order books improved by the highest margin in some 2 ½ years.

Retail trade confidence remained largely flat (-0.1), as more cautious views on the present business situation and volume of stocks were counterbalanced by a brighter expected business situation.

Construction confidence moved broadly sideways (-0.5), reflecting a combination of grimmer assessments of the level of order books and more optimistic employment expectations. Finally, financial services confidence (not included in the ESI) weakened (-7.0), as managers' assessments of the past business situation and past demand clouded over and their demand expectations remained broadly unchanged.