Eurozone economic sentiment touches 3-yr high

The eurozone’s economic sentiment rose to three-year high in November, despite concerns over the sovereign debt crisis in some countries in the region.

The indicator of economic confidence in the 16-nation euro area jumped to 105.3 in November compared with 103.8 in October, the European Commission said on Monday.

Markets had expected the indicator to rise to 104.9 in November.

“November’s EC business and consumer survey confirmed that the sovereign debt crisis in Ireland and elsewhere is not yet standing in the way of a broader recovery in the euro-zone economy. But the worrying division between the core and periphery is continuing to widen,” said Capital Economics in a note.

Sentiment in November was mainly driven by services which rose sharply by 2.1 to 10.2 points in November month-on-month.

Most respondents in the services sector reported brighter assessments of demand and business situation over the past three months, the commission said.

Confidence in industry rose by 0.9 points, mainly driven by buoyant German industry.

Gains in industrial confidence in the euro area reflected improvements in order books and production expectations. Export orders books have also become more upbeat, in the euro area, the commission said.

As a result of growing optimism over the general economic situation in the region and easing fears over unemployment in Germany, the consumer confidence in eurozone rose to minus 9.4 in November compared with 10.9 points in the previous month.

However, the sentiment in retail sector remained broadly unchanged in November.

Among the member countries in the region, economic sentiment in Germany, the eurozone’s largest economy, recorded the highest increase of 2.8 points in November.