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Eurozone economic confidence improved in May after the record declines of March and April, signaling early signs of recovery, survey data from the European Commission showed Thursday.
The economic sentiment index rose to 67.5 in May from 64.9 in the previous month. However, the reading was below economists' forecast of 70.3.
The indicator adds to the evidence that the euro-zone economy bottomed out in April, but that activity is recovering only very slowly, Melanie Debono, an economist at Capital Economics, said.
The ESI's uptick reflected a recovery in industry and consumer confidence which neutralized about a fifth of the combined slump of March and April, the survey showed.
Meanwhile, services confidence continued declining, albeit at a lower rate than in the preceding two months. Changes in construction and retail trade confidence were much more contained, survey results showed.
The consumer sentiment index came in at -18.8 versus -22.0 in the previous month. The reading matched the preliminary estimate.
Consumer sentiment recovered on the back of households' much improved expectations regarding their financial conditions, their intentions to make major purchases and the general economic situation.
The industrial confidence index advanced to -27.5 from -32.5 a month ago. The recovery was entirely attributable to a vivid improvement in managers' production expectations.
The confidence index in retail improved marginally to -29.7 from -30.1 in April.
Meanwhile, the services sentiment index declined to -43.6 from -38.6 in April. While views on the past business situation and past demand worsened, significantly improved demand expectations provided a glimmer of hope for the months to come in May.
As the assessments of the level of order books continued plummeting, the construction sentiment index fell to -17.4 from -16.1 a month ago.
The business confidence index declined to -2.43 from -1.99 in April, data showed. This was the lowest since September 2009.
