European economic confidence improves: EU survey

BRUSSELS, Aug 28, 2009 (AFP) - European business and consumer confidence firmed in August for a fifth month running, an EU survey showed Friday, adding to a recent string of encouraging news for Europe's struggling economies.

The European Commission's economic sentiment indicator for the 16 nations using the euro single currency rose to 80.6 points from 76 points in July, continuing a gradual climb away from a record low 64.6 points in March.

"Recovery of the industrial confidence indicator continued, backed by a strong increase in production expectations and manufacturers' assessment of order books," the EU commission said in a statement.

However, it noted that "stocks of finished goods, production expectations and order books remain well below their long-term averages." The long-term average rate, since 1990, is 100.

Among the larger EU economies, the greatest signs of improvement in confidence were seen in Britain, up 9.7 points, followed by the Netherlands, 7.6 points, and European economic powerhouse Germany which saw economic sentiment rise by 5.1 points in August.

There were also "noteworthy" gains in Poland, Italy and Spain.

In the wider 27-nation European Union, the indicator rose to 80.9 points from 75 points in July.

The commission's separate business climate indicator also continued to recover, improving for a fifth consecutive month with a rise to negative 2.21 points from minus 2.70 points in July.

Recent data has shown European factory orders up, with the eurozone monthly trade surplus doubling.

Germany and France have lumbered out of recession and very nearly brought the rest of the eurozone with them.

However amid fears of double-dip inflation, EU commission chief Jose Manuel Barroso warned that Europe's economy has not made a "firm recovery" from the crisis and the situation remains "very volatile."

Source: AFP

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