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European Commission - Press release

June 2011: Economic sentiment down in both the EU and the euro area

Brussels, 29 June 2011 - In June, the Economic Sentiment Indicator (ESI) declined by 1.0 point to 104.4 in the EU and by 0.4 points to 105.1 in the euro area. The overall decline in the EU resulted from weakening confidence in industry and services, while sentiment among consumers, in retail trade, and construction remained broadly stable." In the euro area, a worsening of sentiment in industry was partly compensated for by gains in services and construction, while confidence in retail trade and among consumers was broadly unchanged. Among the largest Member States , the Netherlands (-3.8 points), the UK (-2.2), Poland (-1.0), France (-0.9) and Germany (-0.6) reported decreases, while the ESI improved in Spain (+2.6) and Italy (+1.8). The ESI remains above its long-term average in Germany and France.

The overall decline in the EU resulted from weakening confidence in industry and services, while sentiment among consumers, in retail trade, and construction remained broadly stable."

Economic sentiment indicator (s.a.)

Although confidence remains far above its long-term average in the sector, industry contributed negatively to overall sentiment. Confidence in industry decreased by 0.8 points in the EU and by 0.6 points in the euro area, on the back of a drop in firms' production expectations and an increase in their assessment of stocks. Managers were also more pessimistic about their export order books and past production, while their appraisal of the level of order books improved.

Sentiment in services decreased in the EU (-1.5), but improved slightly in the euro area (+0.6). The difference between the two regions reflects an important decrease in sentiment in the UK, in particular concerning the expected evolution of demand. Sentiment in the retail trade sector remained broadly unchanged in both the EU (+0.3) and the euro area. In both regions, managers' positive assessments of the present business situation and volume of stocks were largely offset by a decline in business expectations. Sentiment in construction remained broadly unchanged in the EU (-0.3), while it improved in the euro area (+1.1). The indicator remains well below long-term average in both regions. In the EU, employment expectations deteriorated somewhat in industry and improved in services, while in the euro area, employment expectations weakened both in industry and in services. Managers’ selling-price expectations declined in all business sectors, as well as consumers’ price expectations.

Confidence among consumers remained mostly stable in both the EU (-0.3) and the euro area (+0.1). In both regions, consumers unemployment fears remained broadly unchanged, while their saving expectations became more pessimistic. Consumers' assessment of the future general economic situation and their expected financial situation improved in the euro area, while it remained broadly unchanged in the EU.

Confidence in financial services – not included in the ESI – decreased markedly in both the EU (-5.9) and in the euro area (-7.5), mainly because of a weaker assessment of past business situation.

Industrial confidence indicator (s.a.)

Service confidence indicator (s.a.)

Consumer confidence indicator (s.a.)

Retail trade confidence indicator (s.a.)

Construction confidence indicator (s.a.)

Financial services confidence indicator (n.s.a.)

The next Business and Consumer Survey is due to be published on 28 July 2011.

Full tables are available on:

http://ec.europa.eu/economy_finance/db_indicators/surveys/index_en.htm

Contacts :

Amadeu Altafaj Tardio (+32 2 295 26 58)

Catherine Bunyan (+32 2 299 65 12)

Pia Seppälä (+32 2 299 24 88)


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