Brussels, 27 February 2014
February 2014: Economic Sentiment broadly unchanged in the euro area and the EU
In February the Economic Sentiment Indicator (ESI) remained broadly unchanged, marking a marginal increase of 0.2 points in both the euro area (to 101.2) and the EU (to 105.0).
Economic sentiment indicator (s.a.)
February EU: 105.0 - Euro Area: 101.2
Euro area developments
In the euro area, the ESI's marginal increase was due to enhanced confidence in construction and, to a lesser extent, services, retail trade and industry; at the same time, confidence among consumers worsened. Sentiment booked improvements in three out of the five largest euro area economies, i.e. Germany (+0.4), the Netherlands (+0.6) and, especially, Italy (+2.4), while it remained stable in Spain and deteriorated in France (‑1.4).
Industry confidence registered a small improvement (+0.4), backed by managers' slightly more optimistic assessment of the stocks of finished products and the current level of overall order books; their production expectations were virtually unchanged. Managers' assessments of the past production and the current level of export order books, which are not included in the confidence indicator, marked an improvement. The increase in services confidence (+0.8) resulted from managers' more positive assessment of past demand and the past business situation, while their appraisal of expected demand remained broadly stable. Consumer confidence deteriorated (-1.0) as a result of worsened expectations about savings, unemployment and the future general economic situation. Consumers' views on the future financial situation of their households remained broadly flat. Retail trade confidence booked a moderate improvement (+0.5) driven by managers' more positive evaluation of the present business situation, partially offset by less positive business expectations; managers' appraisal of the volume of stocks remained broadly unchanged. Confidence in the construction sector went up (+1.3), resulting from managers' markedly improved assessment of order books coupled with a downward revision of employment expectations. Financial services confidence (not included in the ESI) decreased by 2.5 points. While the assessment of the past business situation and past demand worsened, demand expectations were assessed more positively.
While employment plans were revised upwards in services, they remained virtually unchanged in industry and worsened in retail trade and construction. Selling price expectations rose in services and construction but decreased in retail trade and industry. Also consumers' price expectations were revised downward.
As in the euro area, the headline indicator for the wider EU was broadly unchanged (+0.2). Concerning the two largest non-euro area EU economies, the ESI improved in the UK (+1.0) and remained broadly stable in Poland (+0.3). On a sector basis, services and retail trade marked positive developments while confidence among consumers decreased slightly, consistent with euro area developments. By contrast, confidence in industry and construction booked only marginal changes: these differences can be ascribed to virtually flat industry confidence in both Poland and the UK and a marked decrease in construction confidence in the UK.
EU-wide employment plans were more negative than in the euro area in industry; on the other hand, they remained unchanged in retail trade. As for price expectations, the main differences to the euro area were mild downward revisions in retail trade and among consumers.
Industrial confidence indicator (s.a.)
February EU: -2.3 - Euro Area: -3.4
Service confidence indicator (s.a.)
February EU: 8.4 - Euro Area: 3.2
Consumer confidence indicator (s.a.)
February EU: -9.3 - Euro Area: -12.7
Retail trade confidence indicator (s.a.)
February EU: 3.5 - Euro Area: -2.9
Construction confidence indicator (s.a.)
February EU: -24.7 - Euro Area: -28.5
Financial services confidence indicator (n.s.a.)
February EU: 13.8 - Euro Area: 8.5
The next Business and Consumer Survey is due to be published on 28 March 2014.
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