EUROZONE investor sentiment is now at its strongest since the first half of 2011, before the European Central Bank’s (ECB) aborted attempt to lift interest rates.
Investor sentiment reached 13.3 in January, according to research firm Sentix’s index, with any number over zero indicating a positive outlook. The figure was last higher in April 2011.
Despite the improvement to overall confidence, official figures yesterday also revealed that French industrial output declined at the end of the fourth quarter, dropping by 0.3 per cent from December.
The consensus prediction from economists was for output to stay flat.
At the end of the week, official figures for French GDP in the fourth quarter will be released, revealing whether the country has fallen back into recession for the third time since the financial crisis.
“Production rose 0.3 per cent quarter on quarter and 0.7 per cent year on year over the last quarter of the year, despite a decline in energy and refining output. This is consistent with a solid GDP growth; the actual figure is due on Friday, we expect it up by around 0.25 per cent,” said Dominique Barbet of BNP Paribas.
However, he added: “The 2014 first quarter outlook is less favourable.”
Greek industrial output also posted a rare improvement in December, up 0.5 per cent from the same month in 2012, the first time the measure has improved in six months.
The measure last rose in June.
Italy’s industrial output for December was also announced yesterday, Despite expectations for growth of around 0.5 per cent during 2013, production actually shrank by 0.7 per cent.
Despite inflation running at only 0.7 per cent in January this year, the nascent recovery in confidence and growth has held the ECB from further easing monetary policy, after a surprise cut in interest rates during November last year.
Forecasters at the National Institute of Social and Economic Research (Niesr) still project growth of only 0.8 per cent for the currency union this year, followed by 1.5 per cent in 2015, lagging behind other advanced economies.