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The Economic Sentiment Indicator continues to recover

In July, the Economic Sentiment Indicator (ESI) for the EU and the euro area improved further, registering the fourth consecutive increase in both series since the trough in March.

30 July 2009.

However, in both areas, the level is still far below the long-term average. The ESI increased by 3.9 points in the EU, and by 2.8 points in the euro area, to 75.0 and 76.0 respectively.

Industrial confidence

Recovery of the industrial confidence indicator continued, backed by a further improvement in production expectations and normalisation in the level of stocks. After a more than year-long slide, manufacturers' order books finally showed some improvement.
Still, both stocks of finished goods and production expectations remain below their long-term averages; more importantly, industrial activity remains weak, as manifested by the all-time low level of capacity utilisation.


The increase in the ESI resulted from a general improvement in sentiment in all sectors, except construction. Services improved notably in the EU (+3.6 points) and to a lesser extent in the euro area (+2.1).

Retail trade recovered in both areas (+2.9 in the EU and +3.5 in the euro area), while industry continued its improvement from the trough in March in both the EU (+2.7) and the euro area (+2.2).

Likewise, sentiment among consumers picked up again by 1.9 in the EU and 2.1 in the euro area. Construction, in contrast, remained at the June levels. The majority of the Member States registered an improvement. Among the largest Member States, the UK (+5.0 points), Spain (+3.9), Italy (+3.5) and Germany (+3.2) recorded significant increases in sentiment, while the rise was marginal in France (+0.3), the Netherlands (+0.2) and Poland (+0.1).

Financial services confidence

The financial services confidence indicator – not included in the ESI – moved up by 2.0 points in both areas. While managers' assessment of the business situation and demand over the past three months improved markedly, expectations of demand for the next three months decreased substantially compared to the improvement registered last month.

Business and consumer surveys