LONDON (ICIS)--EU economic sentiment rose in May to highs last seen in 2017 as the easing of lockdown measures across Europe fuelled optimism, the European Commission said on Friday.
The EU executive body’s indices for sentiment and employment expectations rose both in the EU and the 19-country eurozone, with both indicators well above the long-term average.
The EU's indices mirror the PMI indices compiled by IHS Markit measuring activity in manufacturing and services; the flash PMI estimate for May showed the economy expanding at its fastest rate in 15 years.
|Economic Sentiment Indicator (ESI)||113.9||+4.0|
|Employment Expectations Indicator (EEI)||110.3||+2.4|
|Long-term average (2000-2020) = 100.0|
The EU’s vaccination campaign has finally gained momentum after initial issues in distribution in the first quarter; according to analysts at Oxford Economics the economy is currently “rebounding strongly”.
However, a potential boom in consumption would fail to be equally distributed around the bloc if the tourism summer season fails to properly take off in the EU southern countries, they added.
“It is urgent the EU ‘pass health’ is put in place to ensure every country benefit from this consumption windfall,” said the analysts, referring to a potential vaccination passport allowing those who have been jabbed to move freely around the 27-country bloc.
“In fact, restoring conditions for a smooth summer season will be key for the recovery in countries reliant on international tourism, like Greece, Spain or Italy, which have been the hardest hit by the crisis.”
However, overall a consumption boom is likely from June and in the summer months as households’ unemployment expectations have fallen sharply, said Oxford Economics.
“Consumers are confident that the recovery in the labour market will also be swift.”
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