Eurozone indicators point to rise in confidence and inflation

Eurozone indicators to be released this week are expected to show gains in industrial and consumer confidence and manufacturing activity - further evidence of robust momentum - as well as inflation, economists said.
The statistics agency Eurostat is nonetheless predicted to confirm that growth in the 12-nation zone slowed to 0.5 percent in the third quarter from 0.9 percent in the second.
But the agency's estimate for the second quarter may be revised up to 1.0 percent following revisions to data from Germany, Italy and the Netherlands.
Eurozone annual inflation is expected to move up to 1.8 percent in November after dipping to 1.6 percent in October, its lowest level since February 2004. The increase will mainly reflect a decline in oil prices in November 2005 after the sharp rise following US hurricane damage two months before.
Some economists said inflation could even climb to 1.9 percent in November, and most expect it to go above 2.0 percent in January when increases in Germany's value added tax take effect.
The eurozone's overall economic sentiment indicator is forecast to rise further to around 111.0 in November after setting a 5.5-year high of 110.3 in October.
The industrial confidence indicator is expected to advance to plus-6 from plus-5, taking it to its highest level since 2000.
And the consumer confidence indicator is projected to edge up from minus-8 to minus-7, which would be its highest level since 2001. The purchasing managers' index for the eurozone manufacturing sector is seen rising to 57.2 in November, building on the unexpected 0.4 point gain to 57.0 in October.
In Germany, the eurozone's largest economy, the purchasing manufacturers' index (PMI) is likely to move up to 58.5 in November from 58.2 in October, suggesting that German companies are outperforming their eurozone counterparts.
In France, by contrast, the PMI is expected to be unchanged at 56.3 in November, indicating that French companies are suffering from a loss of competitiveness.
The French consumer confidence indicator should edge up to minus-20 in November from minus-21 in October, recovering the ground lost in the previous survey. Lower oil prices and declining unemployment will have given a boost to consumers, economists said.
French producer prices, finally, are expected to decline 0.1 percent in October, trimming the year-on-year PPI inflation rate to 2.3 percent from 2.7 percent.