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European Commission - Press release

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

Brussels, 30 August 2011 - In August, the Economic Sentiment Indicator (ESI) declined by 5.0 points to 97.3 in the EU and by 4.7 points to 98.3 in the euro area. This decline resulted from a broad-based deterioration in sentiment across the sectors, with losses in confidence being particularly marked in services, retail trade and among consumers. Only the construction sector in the euro area recorded an improvement.

Among the largest Member States, Germany (-5.7 points) and the UK (-5.6) reported the strongest decreases in sentiment, followed by Poland (-3.6), the Netherlands (-3.0) and, to a lesser extent, Italy (-0.7), while the ESI remained broadly unchanged in Spain (-0.3). The ESI remains above its long-term average only in Germany.

Economic sentiment indicator (s.a.)

Although confidence in industry remains above its long-term average, it worsened by 2.6 points in the EU and by 3.8 points in the euro area, on the back of a drop in managers' appraisal of the level of order books and production expectations. An increasing number of managers assessed their stocks as being too large. Managers were also more pessimistic about their export order books and past production.

Sentiment in services decreased strongly in the EU (-7.5), but less so in the euro area (-4.2). The difference between the two regions reflects a marked decrease in sentiment in the UK, in particular concerning the past evolution of demand. However, in both regions, past and expected demand were assessed as significantly worse. Sentiment in the retail trade sector dropped in both the EU (-5.8) and the euro area (-5.1), owing to managers' negative assessments of the present business situation and business expectations, and due to an increasing number of firms assessing their volume of stocks as too large. Sentiment in construction weakened in the EU (-1.0), whereas it improved in the euro area (+1.0). Employment expectations deteriorated in industry and in services in both the EU and the euro area. Managers’ price expectations declined in both industry and construction in both the regions, whereas consumers’ price expectations slightly increased.

Confidence among consumers worsened in both the EU (-4.4) and the euro area (-5.3). In both regions consumers were pessimistic about the future general economic situation and expressed higher unemployment fears. Their expected financial situation and their saving expectations were also assessed more negatively than in the past months.

Confidence in financial services – not included in the ESI – strongly decreased in both the EU (-8.1) and in the euro area (-9.6), on the back of managers' negative assessment of past business situation and pessimism about expected demand for their companies' services.

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 29 September 2011.

Full tables are available on:

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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