The economic sentiment in the Eurozone is reaching new heights, suggesting the long-awaited recovery is finally gathering speed. But risks remain, including the spread of COVID-19 variants leading to new restrictions, and scarce input factors for the European industry.

While supply chain disruptions have significantly diminished over the course of 2022, the reversion of the index toward a normal historical range has paused over the past three months. Our analysis attributes the recent pause largely to the pandemic in China amid an easing of «Zero COVID» policies.