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European Commission

Press release

Brussels, 30 August 2012

August 2012: Economic sentiment declines further in both the EU and the euro area

In August the Economic Sentiment Indicator (ESI) decreased markedly by 2.0 points in the EU, to 87.0, and by 1.8 points in the euro area, to 86.1. In both areas, the loss in confidence was particularly strong among consumers, retail trade and construction managers. In the services sector the loss in confidence was marked in the euro area but more contained in the EU as a whole. On the contrary, while confidence in industry decreased in the EU, it remained broadly stable in the euro area.

A majority of Member States witnessed a drop in economic sentiment. Among the largest Member States, sentiment worsened in Spain (-4.9), the UK (-3.1), Italy (-2.4), Poland (-1.8) and Germany (-1.0) while it improved in France (+0.4) and the Netherlands (+0.6).

Economic sentiment indicator (s.a.)

August EU: 87.0

Euro Area: 86.1

Confidence in industry continued the downward trend reported since March in the EU (-1.7), although it remained broadly stable in the euro area (-0.2). In both areas, managers' production expectations and their assessment of the current level of overall order books deteriorated – although the declines were less significant in the euro area - while managers' assessment of the adequacy of their stocks of finished products improved. Managers' assessment of past production improved in both areas, while their assessment of export order books deteriorated in the EU and improved in the euro area. For the fifth consecutive month confidence in services declined in both the EU (-1.0) and the euro area (-2.3). This decline resulted from deteriorations in all the components of the indicator (i.e. past business situation, past demand and demand expectations). Confidence in retail trade decreased markedly in the EU (-3.2) and the euro area (-2.3). Both the present and the expected business situation were clearly assessed more negatively. In the EU, but not in the euro area, developments in the current volume of stocks were viewed somewhat more negatively too. In the construction sector, confidence declined sharply in the EU (-3.0) and the euro area (-4.6). The decrease was attributable to a more negative assessment of order books and employment expectations.

In both areas, employment plans were revised downwards for industry, construction and - to a lesser extent - services. By contrast, they were revised upwards in the retail trade sector. In the EU, selling price expectations decreased in services, retail trade and construction, while they increased in industry. The picture is broadly the same in the euro area with the exception of retail trade, where managers' selling price expectations edged up.

Consumer confidence weakened in both the EU and the euro area by 2.5 and 3.1 points respectively, amid higher unemployment fears and worsened consumer expectations about the future general economic situation, their households' financial situation and savings.

Confidence in financial services, which is not included in the ESI, declined in the EU (-3.5) and remained broadly stable in the euro area (+0.1). In the EU the score results from a deterioration in all the components (past business situation, past and expected demand), while in the euro area an improvement in demand expectations outweighed the declines in the other two components of the indicator.

Industrial confidence indicator (s.a.)

August EU: -14.5

Euro Area: -15.3

Service confidence indicator (s.a.)

August EU: -11.4

Euro Area: -10.8

Consumer confidence indicator (s.a.)

August EU: -22.7

Euro Area: -24.6

Retail trade confidence indicator (s.a.)

August EU: -13.5

Euro Area: -17.3

Construction confidence indicator (s.a.)

August EU: -34.5

Euro Area: -33.1

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

August EU: -7.4

Euro Area: -10.1

The next Business and Consumer Survey is due to be published on 27 September 2012.

Full tables are available on:

Scheduled publication dates

Flash estimate

Final release EU, euro area and Member States

September 2012

20 September 2012

27 September 2012

October 2012

23 October 2012

30 October 2012

November 2012

22 November 2012

29 November 2012

Contacts :

Simon O'Connor (+32 2 296 73 59)

Vandna Kalia (+32 2 299 58 24)

Audrey Augier (+32 2 297 16 07)

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