By Chris Jones - 5th January 2006
Confidence in the EU economy is growing slowly but remains low in a number of key sectors, according to the latest figures from Brussels.
The economic sentiment indicator for December, based on surveys carried out among EU consumers and businesses, showed a slight upturn compared to the previous month.
But economic sentiment – a reflection of the general state of the EU economy – remains far below the peak levels of 2000.
In some business sectors – notably services and construction – confidence is ebbing as a result of the current weak economic conditions and concerns about future orders.
But confidence in the retail and industry sectors is increasing, with orders continuing to rise.
There was some good news, however, with consumers more bullish than business.
The majority of Europeans expecting to see an improvement in their own financial situation and that of the economy as a whole during the next few months.
“Consumers have adjusted their savings expectations downwards, and this, together with the improved financial situation, could be a forerunner to rising consumer expenditure in the near future,” the European Commission said.
But the declining confidence in some of the EU’s biggest markets – notably the UK, France, Poland and Italy – is a potentially worrying development for the long-term economic prospects of the EU.
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