World Economy

Euroland Sentiment Hits 17-Year High

Euroland Sentiment Hits 17-Year HighEuroland Sentiment Hits 17-Year High

Eurozone economic confidence surged to its highest in almost 17 years, reflecting an improved outlook for a region that not long ago was blighted by record joblessness and a double-dip recession.

The index of industry and consumer sentiment rose to 114 in October from a revised 113.1 the previous month, the European Commission in Brussels said on Monday. That’s the gauge’s fifth consecutive monthly increase and the strongest reading since January 2001. It compares with a median estimate of 113.3 in a Bloomberg survey.

After the past decade dealt the eurozone two prolonged economic slumps, a sovereign debt crisis and an almost-exit of Greece from the single currency, the 19-nation region is experiencing a growth revival. Unemployment is declining and consumer spending, as well as corporate earnings and investments, are on the rise. Better performances in countries from the US and Canada to Russia and India have also buoyed that upswing.

“In big picture terms, we’re still in a period of above-trend growth,” said Nick Kounis, an economist at ABN Amro Bank NV in Amsterdam. “One of the things which has changed for the better in the last, say, six to nine months has been a marked improvement in the global growth backdrop, and that has been very important for Europe.”

The export-oriented manufacturing sector has been a beneficiary of the turnaround, with a purchasing managers’ index gaining in recent months. Companies in that branch took on staff at the fastest pace on record in October. Sentiment increased across all sectors, according to the European Commission.

The euro was little changed after the report and traded at $1.163 in Frankfurt.

Data on Tuesday are expected to show the bloc’s economy expanded for an 18th quarter in the three months through September. The unemployment rate is forecast to have fallen to 9% last month, versus a high of more than 12% back in 2013.

Germany, the region’s largest economy, is headed for its fastest annual expansion since 2011, and the better local and international dynamics have been reflected in company earnings.

As for Spain, which was particularly buffeted by job losses, unemployment fell to a nine-year low in the third quarter amid economic growth of 0.8%, providing some good news for the government as it tries to get a grip on the political crisis in Catalonia.

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