Euro zone economic sentiment improved in July, data showed today, signalling the economy is bottoming out though not yet growing.
A monthly survey by the European Commission showed economic sentiment in the 16-country zone rose to 76.0 points in July from 73.2 in June, the fourth improvement from a trough of 64.6 in March.
The strongest gains in economic sentiment were recorded in Spain, by 3.9 points, Italy, 3.5, and Germany, 3.2.
The survey also confirmed deflationary pressure in the euro zone.
Inflation expectations 12 months ahead among households fell again in July to set a new low of -12 points, from -9 points in June, marking the fourth consecutive month of expectations of falling prices.
Selling-price expectations among manufacturers remained unchanged at -11.
Eurostat will publish its euro zone inflation estimate for July tomorrow. In June, consumer prices in the currency area fell 0.1 per cent from a year earlier.
Germany, the currency area's biggest economy, reported on Wednesday its annual inflation turned negative, with prices falling by 0.6 per cent year-on-year.
Separately, the Commission said its business climate indicator rose to -2.71 in July from an upwardly revised -2.92 for June, above analysts' expectations but still at historically low levels.
"The level is still very low, even when compared to the previous historical lows of 1993. This suggests that year-on-year industrial production growth will have been negative in June and will remain subdued in July," the Commission said.
The Commission said after months of falls, managers' views about order books and export order books had started to improve.
They were also more upbeat about the production trend observed in recent months, production expectations and stocks of goods.
Reuters