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European Commission - Press release
October 2011: Economic sentiment remains broadly unchanged in both the EU and the euro area
Brussels, 27 October 2011 - In October, the Economic Sentiment Indicator (ESI) remained broadly unchanged in both the EU (-0.1 points) and the euro area (-0.2), at a level of 93.8 and 94.8, respectively. Underlying this overall unchanged picture are a number of mixed signals across sectors. Further declines in sentiment in industry and among consumers were offset by increases in services, retail trade and construction in the EU, as well as by an increase in construction and a very minor improvement in services in the euro area.
Among the largest Member States, Germany (-0.8 points), the Netherlands (-0.6), and Poland (-0.6) reported decreases in sentiment, while France (+1.2) and Italy (+0.3) showed an improvement. Meanwhile, the readings for the UK and Spain remained broadly unchanged. The ESI stayed above its long-term average only in Germany.
Economic sentiment indicator (s.a.)
Confidence in industry worsened by 1.1 points in the EU and by 0.7 points in the euro area, on the back of a decrease in production expectations and in managers' appraisal of the level of order books. In the euro area, an increasing number of managers assessed their stocks as being too large, while in the EU, managers' assessments of stocks improved marginally. In both regions, managers were also more pessimistic about their export order books, while their assessment of past production improved slightly in the EU but deteriorated markedly in the euro area.
Sentiment in services picked up in the EU (+1.5) and remained broadly unchanged in the euro area (+0.2). Managers in the EU - in particular in the UK - were more positive about past demand development. In the euro area an improvement in expected demand offset a decline in past demand development. Sentiment in the retail sector improved in the EU (+0.8) - mostly thanks to managers' more positive views on the expected business situation - while it remained broadly constant in the euro area. Sentiment in construction improved in both the EU (+1.0) and in the euro area (+1.2). In both the EU and the euro area employment expectations deteriorated in industry, services and retail trade while increasing in construction. In both regions managers’ price expectations fell in industry and retail trade, while they increased in services and construction. Consumers’ price expectations increased in the EU but declined in the euro area.
Confidence among consumers decreased in both regions (-1.1 in the EU and -0.8 in the euro area), reflecting increased pessimism about the future general economic situation and rising unemployment fears.
Confidence in financial services – not included in the ESI – decreased significantly in both the EU (-8.4) and in the euro area (-12.5), driven by a worsening of all underlying confidence indicator components (recent developments in business situation as well as past and expected demand).
In the quarterly survey of the manufacturing sector, carried out in October 2011, industrial managers reported a broadly unchanged number of months of production assured by existing order books in the EU as well as in the euro area. In both regions, managers' assessments of both new orders over the past three months and export volume expectations for the three months ahead decreased strongly. By contrast, managers' appraisal of their competitive position on foreign markets outside the EU improved in the EU and remained broadly stable in the euro area over the past three months. Capacity utilisation continued its downward trends in both the EU and the euro area. At 80.0% in the EU and 79.7% in the euro area, capacity utilisation is below its long-term average.
Industrial confidence Indicator (s.a.)
Service confidence indicator (s.a.)
Consumer confidence indicator (s.a.)
Retail confidence indicator (s.a.)
Construction confidence indicator (s.a.)
Financial services confidence indicator (s.a.)
The next Business and Consumer Survey is due to be published on 29 November 2011.
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