Investor sentiment in the eurozone has risen this month and an assessment of investor expectations hit its highest level since November 2017, according to a new survey.
Sentix’s index for the euro zone rose to -24.8 from -41.8 in May, compared with the Reuters consensus forecast for a reading of -22.5.
The research firm’s current situation index rose to -61.5 from -73.0 in May. The expectations index rose to 21.8 from -3.0 in May, registering its third increase in a row and hitting its highest level since November 2017.
“The economy is waking up from its deep sleep. But the road to normality is long,” said Sentix managing director Manfred Huebner.
“For the euro zone, investors expect that within a year, just over 50 per cent of the slump can be made up,” Huebner continued.
“This means that in a year’s time we would still be noticeably below the pre-crisis level. And this despite all the stimulus measures, the fiscal packages and monetary easing,” he added. “An upswing has begun, but a real trend reversal is not yet assured.”
Sentix surveyed 1,173 investors between 4 June and 6 June, 263 of which were institutional investors.
The data comes after German industrial output recorded a record plunge in April as the coronavirus pandemic led manufacturers to pause production. Firms in the country are expecting a bumpy road ahead, despite the country’s massive stimulus package.
Oxford Economics’ Katharina Koenz said the Sentix index provided the “timeliest” assessment of economic conditions in the eurozone.
“Today’s release underlines that financial markets think the worst is behind us for the eurozone economy, boding well for the release of other surveys such as the PMIs later this month,” she added.