Brussels, 31 May 2010
May 2010: Economic Sentiment Indicator's upward trend pauses
Important notice: business surveys data for May 2010 are now classified in accordance with an updated version of the Nomenclature of Economic Activities (NACE rev. 2); the current developments should therefore be interpreted with caution. In May, the Economic Sentiment Indicator (ESI) declined, moving back to 100.0 (-1.9 points) in the EU and to 98.4 (-2.2 points) in the euro area. While Industry sentiment continued to improve, all other sectoral sentiment indicators dropped in the EU and the euro area.
Economic sentiment indicator (s.a.)
Euro area: May 98.4
It should be noted that the latest developments in the ESI are influenced by the change of classification of economic activities that was implemented for the business surveys in May, leading to a break in the series. The results for this month are based on the NACE Rev.2 classification, while data up to April 2010 are based on NACE Rev.1. Internal checks, however, indicate that the changeover has affected the level, making interpretation more difficult. This level shift did not, on the whole, affect the direction of the change, but only its magnitude.
The Consumer Confidence Indicator, which is not subject to the changeover, declined markedly among EU and euro area consumers (both down by 3 points). Consumers were worried about the general economic outlook, although their assessment of the labour market continued to improve. The sharpest drops were reported in Southern Europe and the UK. Confidence declined among German and French consumers as well, while Dutch consumers were more optimistic.
Confidence in financial services – not included in the ESI and unaffected by the changeover – deteriorated by 1 point in the EU and by 4 points in the euro area. In both areas, managers were particularly worried about the business situation. While their assessment of past evolution of demand improved, they where pessimistic about the future.
Industrial confidence indicator (s.a.)
EU: May -5
Euro area: May -6
Service confidence indicator (s.a.)
EU: May 2
Euro area: May 3
Consumer confidence indicator (s.a.)
EU: May -15
Euro area: May -18
Retail trade confidence indicator (s.a.)
EU: May -3
Euro area: May -5
Construction confidence indicator (s.a.)
EU: May -30
Euro area: May -28
Financial services confidence indicator (n.s.a.)
EU: May 25
Euro area: May 21
The next Business and Consumer Survey is due to be published on 29 June 2010.
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