Wednesday April 29, 12:21 PM
European economic confidence 'turns positive'
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BRUSSELS (AFP) - Business and consumer confidence in the European economy rose in April for the first time in nearly two years, an EU survey showed on Wednesday, adding to signs the slump is stabilising.
The European Commission's economic sentiment indicator for the 16-nation eurozone rose to 67.2 points in April, from 64.7 points in March, beating economists' expectations for an increase to only 65.3 points.
The improvement marked the first increase since May 2007 in the eurozone.
In the 27-nation European Union, the index rose to 63.9 points from 60.4, also picking up for the first time since May 2007 with the exception of a small blip in March 2008.
"If this trend is confirmed in the coming months, the likelihood that the first quarter marked the trough of this cycle will strengthen," said Daniele Antonucci at consultants Capital Economics.
An improved outlook in the industrial sector and among consumers led overall confidence higher in both regions while conditions in the service industries got only slightly better.
Meanwhile, the commission's separate business climate indicator also improved, backing away from a 24-year low reached in March. The index rose to negative 3.33 points in April from negative 3.49 points.
"The rise in confidence suggests that both businesses and consumers are starting to become more confident in recovery prospects following the major stimulative action and banking support measures," IHS Global Insight economist Howard Archer said.
"Sharply lower inflation is also clearly supporting consumer sentiment, although the upside is being limited by still heightened unemployment fears," he added.
Archer said that despite the improvement, confidence remained "at desperately low levels compared to long-term norms" and warned that it was likely to remain "highly vulnerable for an extended period."
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