July 2010: Economic Sentiment Indicator edges up
Important notice: since May 2010 business surveys data are classified in accordance with an updated version of the Nomenclature of Economic Activities (NACE rev. 2) causing a potential break in series at this date.
In July, the Economic Sentiment Indicator (ESI) edged up to 102.2 (by 1.9 points) in the EU and to 101.3 (by 2.3 points) in the euro area. These results are strongly influenced by markedly positive readings in Germany.
Economic sentiment indicator (s.a.)
EU: July 102.2 Euro area: July 101.3
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The majority of Member States reported improvements in sentiment. Among the largest Member States, Germany registered the most significant increase (+4.0), followed by France (+2.6), Poland (+1.9) and Italy (+1.7). Improvements were less pronounced in the UK (+1.4) and the Netherlands (+1.2). In contrast, sentiment declined in Spain (-2.2).
Sentiment in industry, which increased by 2 points in both regions, was the main contributor to the overall improvement. Most respondents in this sector reported substantial improvements in their order books. However, managers were cautious on their production expectations. The quarterly manufacturing survey indicates an increase in capacity utilisation. It now stands at about 77% in both the EU and the euro area, though still below the long term average (81%).
As indicated in the flash estimate released earlier, confidence among consumers regained momentum (+3 in the euro area and +1 in the EU). More optimism about the general economic situation and very significant easing unemployment fears in Germany contributed to the overall improvement. Confidence in services improved by 2 points in the EU and the euro area, driven by brighter assessments of demand and the business situation over the past 3 months. Sentiment in the retail sector increased by 2 points in the euro area and by 4 points in the EU, mainly owing to upbeat business expectations in the UK and in Germany. Sentiment in construction remained broadly unchanged in both regions.
Confidence in financial services –not included in the ESI– recorded the second significant drop in a row in the EU (-6), driven mainly by a sharply negative assessment of expected demand. In the euro area the confidence continued to increase (+3).
Industrial confidence indicator (s.a.)
EU: July -4
Euro area: July -4
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Service confidence indicator (s.a.)
EU: July 6
Euro area: July 6
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Consumer confidence indicator (s.a.)
EU: July -14
Euro area: July -14
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Retail trade confidence indicator (s.a.)
EU: July 0
Euro area: July -4
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Construction confidence indicator (s.a.)
EU: July -32
Euro area: July -29
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Financial services confidence indicator (n.s.a.)
EU: July 12
Euro area: July 23
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The next Business and Consumer Survey is due to be published on 30 August 2010.
Full tables are available on:
http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm
