As anxious eyes were on developments in European Union economies and stock markets after the triple blow against the credit ratings of Greece, Italy and Spain, EU statistics office Eurostat released two surveys showing greater confidence on the economic and business front – with Italy and Spain among countries where economic sentiment had improved.

The survey results were released on April 29 2010, coinciding with efforts by the EU, European Central Bank, International Monetary Fund and the Greek government to rescue Greece’s economy – and coming after falls on stock markets in most parts of the world after previous days saw rating agency Standard and Poor’s send negative messages about, among others, Greece.

The Eurostat survey said that in April 2010, the Economic Sentiment Indicator (ESI) again had risen and exceeded its long term average, reaching 101.9 (+2.1 points) in the EU and 100.6 (+2.7) in the euro area.

"However, coming out of a deep recession clearly means that further sustained improvements will be required for economic activity to reach its pre-crisis levels," Eurostat said.

Most EU member states reported across-the-board improvements in sentiment.
 
Among the largest EU member states, Germany registered another substantial increase (+4.3). Improvements were registered in France (+2.0), Italy (+1.5), Spain (+1.1), the Netherlands (+1.1) and the UK (+0.8), while Poland remained broadly unchanged (-0.1).

Driven by substantially better order books, sentiment in industry improved by two points in the EU and by three in the euro area.
 
Services and retail also registered significant improvements and consumer confidence regained its momentum, largely due to easing unemployment fears in Germany. In contrast, sentiment in construction remained very weak.

The quarterly manufacturing survey indicates an increase in capacity utilisation, particularly so in Germany. It now stands at about the 75 per cent mark in both the EU and the euro area, still considerably below the long-term average (81 per cent).

According to the biannual industrial investment survey, which was carried out in March and April of this year, managers in the EU and the euro area expect real investment to drop by two per cent.

Although still negative, the outlook for this year has improved when compared to the expectations reported half a year ago. Nonetheless, there are significant differences among countries: managers in Germany, France and the UK expect to increase investment in 2010, which contrasts with sizable expected reductions in Italy, Spain and Poland.

In April 2010, the Business Climate Indicator for the euro area improved further.

"The rebound of the indicator suggests that economic activity in industry will continue to recover in the coming months, although it has still some way to go to reach its pre-crisis level," Eurostat said.

Managers in industry were upbeat about their order books and the production trend observed in recent months. They were also optimistic about their export order books. They considered that stocks of finished goods were lower than desirable and still declining. Their previously optimistic production expectations remained largely unchanged.