Eurozone consumer activity returns to pre-pandemic levels

Europeans are leaving home for shopping, eating out, traveling and visiting cinemas, as they did before the pandemic, as a sign of regaining consumer confidence throughout the euro area.

According to data on economic activity in September, European consumers are high in Covid despite many concerns about economic news, including rising energy prices, supply chain disruptions and concerns about the impact of China’s economic slowdown. -19 I am encouraged by the vaccination rate.

“For now, the data are in line with a decent pace of recovery,” said Davide Oneglia, economist at TS Lombard, a research and macroeconomic forecasting consultant.

Part of the rebound was due to school reopening and workers returning to the office. This is reflected in the use of Eurozone airports and domestic public transport, both reaching their highest levels since the launch of the pandemic in early 2020, according to Google and Apple mobility data.

But increased shopping trips, eating out, and access to cinema “suggests consumers are more confident than they are now,” said Marion Amiott, senior economist at rating agency S & P. According to Box Office Mojo data, movie revenue has already returned to pre-pandemic levels.

Policy makers are increasingly monitoring non-standard economic indicators, such as mobility indicators, to get snapshots of economic activity that is more timely but less comprehensive than official data.

Increased consumer confidence occurs as Covid-19 infections decline and the number of fully vaccinated people doubles in the last three months. As of mid-September, nearly two-thirds of the eurozone population had been jabed twice.

Nicola Nobile, an economist at the consultancy Oxford Economics, said: “The tracker has gained solid momentum.”

Melanie De Bono, senior European economist at Pantheon Macroeconomics, added that strong consumer confidence “supports our view that consumer spending growth accelerated this quarter.”

Consumption accounted for 1.9 percentage points of 2.2% growth in the euro area in the second quarter, so Nomura’s Chiara Zangarelli predicted that the block’s economic recovery would continue, with a 2.3% increase in the third quarter. .. OECD recently Has been updated Eurozone economic forecast for this year.

However, growth in the euro area could slow in the coming months. China’s economic slowdown could hurt exporters, with international travel still below pre-pandemic levels by about 30%, as seen in the unexpected sharp drop in recent corporate sentiment surveys. Supply chain disruptions are hitting manufacturers hard. German truck mileage data, which is considered a substitute for industrial activity, will also remain low in 2021.

The recovery of the euro area lags behind the United States and China, whose economies have already reached pre-pandemic levels.

Nonetheless, OECD weekly economic activity trackers using real-time high-frequency indicators exceeded 2019 levels in early September in most eurozone countries.

According to field data, the labor market remains strong and job vacancies continue to grow.

Marchelle Alexandrovich, an economist at investment bank Jeffreys, said this could be confident that the European Central Bank could curtail its emergency pandemic program for asset purchases next year. He predicts that the eurozone economy will return to pre-pandemic levels in the next two quarters.

But as ECB Governor Christine Lagarde said this month, the euro area was “not out of the woods” and uncertainties were rising.