Eurozone economic confidence rose slightly for a third consecutive month in July, reaching a new 10-year high. The economists forecasts were for decline. The economic confidence indicator in the 19 currency countries rose to 111.2 points in July from 111.1 points in June and 109.2 in May driven by greater optimism in the services sector. The average forecast of economists was for a drop to 110.8 points after the June increase, when the indicator reached the highest level in the last decade.
The figures confirm the stable recovery in the Eurozone, with output expected to increase by another half a percentage point in the second quarter after a strong first quarter. Preliminary production data will be released on next Tuesday.
Despite the unexpected rise in business sentiment, the business confidence index fell to 1.05 points in July, compared to revised 1.16 points in June, which was the highest since April 2011. The economists predicted a smaller drop to 1.12 points in July.
The increase in the overall economic confidence indicator is mainly due to higher optimism in the service sector, the largest in the Eurozone economy, which rose to 14.1 points in July from 13.3 in June. The manufacturing sector remained at 4.5 points, well above the long-term average of -6.4.
Consumer sentiment ranges from -1.7 points in July, well above the long-term average.
Inflationary consumer expectations over the next 12 months declined to 11.7 points in July from 13 points last month, while sales price expectations between manufacturers rose to 7.5 from 7.1 in June.