Official Data: Eurozone Economic Confidence Picks Up

Economic and business confidence in the 17-nation eurozone picked up further in October but the pace of improvement has slowed, official EU data showed on Wednesday.

The European Commission said its Economic Sentiment Indicator (ESI) rose 0.9 points to 97.8 points in October.

The eurozone emerged from a record 18-month recession in the second quarter this year with better-than-expected growth of 0.3 percent, but recent data has suggested the expansion may have cooled since then.

The Commission said this was the case with the ESI reading.

"While the upward trend observed since May has been continued, the magnitude and sectoral scope of the improvement in confidence has moderated compared to recent months," it said in a statement.

Ben May, European economist for Capital Economics, said the survey outcome pointed to "moderate eurozone growth" continuing in the fourth quarter but below what is hoped for.

"On past form, the ESI now points to annual ... growth of almost 1.0 percent. This is consistent with further, albeit small, quarterly rises in in the third and fourth quarters of about 0.2 percent," May said in a note.

"Overall, (it is) another sign that the eurozone has continued to grow but we continue to think that the recovery will remain sluggish and that ... growth will be weaker than the consensus expectation," he added.

In the ESI review, the Commission said the improvement was driven by industry and to a lesser extent, consumers while services, retail trade and construction all weakened.

Among the five biggest eurozone economies, sentiment improved in the Netherlands with a gain of 3.3 points, France was up 2.6 and Germany, Europe's powerhouse, put on 0.8 but Spain dropped 2.2 and Italy 2.0.

For the wider 28-member European Union, the Commission said its ESI reading increased 1.1 points to 101.8 in October.

On this measure, both industry and services improved while construction showed a slight gain in the EU.

The gain in services, in contrast to the eurozone, was largely due to Britain, with the biggest non-eurozone economy and which is predominantly service-orientated.

Christian Schulz of Berenberg Bank said the October ESI eurozone figure was higher than the expected 97.2 points and likely reflected a strong export performance helping industry.

If the reading remains below its long-term average, the recovery is still "making further progress," Schulz said, citing as well the Commission's Business Climate Indicator.

The Commission said the BCI for the eurozone rose 0.18 points in October to finish at minus 0.01, again extending a rise from May.

At the worst of the debt crisis and economic slump in 2009, the BCI was at more than minus 20 points for several months.

The Commission, the EU's executive arm, said production, production expectations and order books all "improved markedly" in October in the BCI survey.