Europe’s Economic Sentiment Drop in November

Economic sentiment dropped in both the European Union and eurozone in November, according to the European Commission on Friday, November 27, 2020.

The European Union says the decline stemmed from a deteriorated confidence in retail trade, services, and among consumers.

This month, the Economic Sentiment Indicator (ESI) fell 3.6 points to 86.6 in the EU27 and 3.5 points to 87.6 in the eurozone, the commission said in a press release.

The eurozone/euro area or the EA19 represents member states that use the single currency – euro – while the EU27 includes all member countries of the bloc.

“After the partial recovery of sentiment between May and September and the broad sideways movement in October, the drop is the first one since sentiment fell sharply in the first COVID-19 wave,” the statement noted.

Employment Expectations Indicator (EEI) saw the second monthly decline in a row, down by 3.3 points in both regions to 86.6 in the euro area and 87.2 in the EU.

Confidence in industry and construction posted comparatively mild setbacks during the same period.

Among the largest euro-area economies, Italy saw the largest decrease in the ESI with minus 8.7, followed by France (-4.8), Germany (-2.8), and Spain (-2.0).

The Netherlands bucked the trend with a moderate improvement in sentiment (1.0).

Turkey’s economic confidence also posted a monthly decline in November, by 3.5% to reach 89.5, down from 92.8 in October according to the Turkish Statistical Institute (TurkStat) on Friday. ​​​​​​​

“This decrease in economic confidence index stemmed from the decreases in consumer, real sector (manufacturing industry), services and construction confidence indices,” TurkStat said.

Among sub-indices, services, real sector, consumer, and construction confidence indices were down monthly.

The Turkish retail trade index, meanwhile, remained unchanged at 95 in November.

The consumer confidence index, calculated from survey results, is evaluated within a range of 0-200, indicating an optimistic outlook when the index is above 100, and a pessimistic one when it is below.