Brussels, 27 June 2014
June 2014: Economic Sentiment down in the euro area, broadly stable in the EU
In June the Economic Sentiment Indicator (ESI) decreased in the euro area (by 0.6 points to 102.0),1 while it remained broadly stable in the EU (-0.1 points at 106.4).
Economic sentiment indicator (s.a.)
June EU: 106.4 - Euro Area: 102.0
Euro area developments
The relapse of euro area sentiment to its April level means a continuation of the sideways movement observed in recent months. It resulted from a deterioration in industry, construction and, to a lesser extent, consumer confidence. Retail trade confidence remained broadly unchanged, while services confidence booked a slight improvement. Amongst the largest euro area economies, the ESI eased in Germany (-1.3), France (-1.2) and Italy (-1.0), while it increased in the Netherlands (+0.7) and, more significantly, in Spain (+2.2). Worth highlighting is the 4.6 points rise in Greece, bringing its ESI above the long-term average for the first time since August 2008.
The weakening industry confidence (-1.2) was caused by managers' more careful views on expected production, the current level of overall order books and, less so, the stocks of finished products. Also the assessments of the level of past production and export order books, which do not enter the calculation of the confidence indicator, worsened. The slight improvement in services confidence (+0.4) was propelled by managers' significantly brighter demand expectations, which more than outweighed a more negative stance on the past business situation and past demand. Consumer confidence slid somewhat (-0.4) owing to more cautious assessments of future unemployment and future savings, which were only partly offset by a moderate improvement in consumers' expected financial situation. The assessment of the future general economic situation remained broadly unchanged. The broadly flat development in retail trade confidence (+0.3) reflects a perceived greater adequacy of the volume of stocks and managers' higher satisfaction with the present business situation, which contrasted with more pessimistic views on the expected business situation. The slipping construction confidence (-1.7) was fuelled by downward revisions in employment expectations. The assessment of the level of order books, by contrast, was broadly unchanged compared to last month. A slight deterioration (-0.7) in financial services confidence (not included in the ESI) halted the sharp upward movement of the previous two months. Less positive appraisals of the past business situation and demand expectations were only partially offset by better assessments of past demand.
Employment plans saw a significant downward revision in construction, while they remained broadly unchanged in industry and retail trade and improved in the services sector. Selling price expectations increased in all surveyed business sectors (industry, services, retail trade, construction). By contrast, consumer price expectations, following the pick-up in May, re-embarked on the declining trend observed since the beginning of the year.
The headline indicator for the EU remained broadly stable (-0.1), owing to brightening sentiment in the two largest non-euro area EU economies, the UK (+2.2) and Poland (+1.2). EU services confidence rallied, while, as in the euro area, industry, construction and financial services confidence slipped. Consumer confidence remained virtually unchanged, whereas confidence in retail trade fell, contrasting with the broadly flat euro-area development.
Consumers' more cautious unemployment expectations and construction managers' lower employment plans were also observed at EU-level. However, the downward revisions to employment plans in the retail trade and services sectors and the upward revision in industry meant a deviation from the euro area. EU price expectations were in line with those for the euro area.
Industrial confidence indicator (s.a.)
June EU: -2.4 - Euro Area: -4.3
Service confidence indicator (s.a.)
June EU: 9.7 - Euro Area: 4.2
Consumer confidence indicator (s.a.)
June EU: -4.3 - Euro Area: -7.5
Retail trade confidence indicator (s.a.)
June EU: 2.8 - Euro Area: -2.1
Construction confidence indicator (s.a.)
June EU: -26.1 - Euro Area: -31.8
Financial services confidence indicator (n.s.a.)
June EU: 20.8 - Euro Area: 16.4
The next Business and Consumer Survey is due to be published on 30 July 2014.
Full tables are available on:
Scheduled publication dates
The business confidence indices for France were slightly revised compared to the May press release, causing a downward revision of a decimal point for the euro area ESI (to 102.6).