In October, the Economic Sentiment Indicator (ESI) decreased in both the euro area (by 1.1 points to 109.8) and the EU (by 0.8 points to 110.4). The drop in euro-area sentiment was caused by weaker confidence in industry, services and, particularly, retail trade. Confidence in construction and among consumers held up well, moving essentially sideways. Amongst the largest euro-area economies, the ESI rose only in Spain (+1.9), while it booked losses in Germany (-1.3), the Netherlands (-1.3), France (-1.2) and Italy (-0.9). The marginally better development of the ESI in the EU (-0.8) can be attributed to virtually unchanged sentiment in the largest EU economy outside the euro area, the UK (+0.2), as well as comparatively moderate losses (-0.9) in the Polish indicator. From a sectoral perspective, the deterioration in industry, services and retail trade confidence was less pronounced in the EU, while sentiment in construction and among consumers remained broadly flat, in line with euro-area developments. As regards financial services confidence, the EU aggregate moved essentially sideways, rather than picking up. In October, the Business Climate Indicator (BCI) for the euro area decreased (by 0.20 points to +1.01). Managers' appraisals of their overall and export order books deteriorated, as did, to a lesser extent, their assessments of past production and the stocks of finished products. Managers' production expectations, by contrast, remained virtually unchanged.