BRUSSELS (Reuters) - Economic sentiment in the 19 countries sharing the euro was much better than expected in September thanks to a rebound of confidence in industry in the biggest economies, data from the European Commission showed on Thursday.
The economic sentiment index, calculated by the European Union’s executive arm, rose to 104.9 in September from 103.5 in August, beating expectations of no change and moving further above the long-term average of 100.0.
Economic sentiment is an early indicator of economic activity, signaling trends in gross domestic product growth.
Separately, the Commission’s business climate indicator, which points to the phase of the business cycle, also jumped to 0.45 in September, its highest level since October 2015, beating market expectations of a modest rise to 0.05 from 0.03 in August.
The Commission said economic sentiment improved the most in the biggest euro zone economies - Germany, France, Italy, Spain and the Netherlands.
The rise was fueled mainly by rallying industry confidence, which rose to -1.7 from a six-month low of -4.1 in August, on managers’ sharply improved assessments of overall order books as well as better production expectations and, to a lesser extent, stocks of finished products.
Sentiment in the services sector, which generates two thirds of the euro zone’s GDP, rose to 10.0 in September from 9.9 in August and the mood among consumers rose to -8.2 this month from -8.5 last month, well above the long-term average since 1990 of -12.7.
Reporting By Jan Strupczewski; editing by Philip Blenkinsop