Economic sentiment at all-time low in EU and eurozone
In December 2008 the Economic Sentiment Indicator (ESI) declined considerably in the European Union and the eurozone, continuing the sharp fall in sentiment already observed in the October and November surveys which are carried out by the European...
In December 2008 the Economic Sentiment Indicator (ESI) declined considerably in the European Union and the eurozone, continuing the sharp fall in sentiment already observed in the October and November surveys which are carried out by the European Commission's Directorate-General for Economic and Financial Affairs.
The ESI fell by seven points in the EU and by 7.8 points in the eurozone, to 63.5 and 67.1 respectively. This puts the ESI for both the EU and eurozone at its lowest since the current series was launched in January 1985.
In both the EU and the eurozone, the decline in the overall ESI reflects a general decrease in sentiment. The industrial and consumer confidence indicators fell significantly again and and reached their lowest level since January 1985 in both blocs. The services confidence indicator marks a new record low level for both regions since the introduction of the survey 12 years ago. Sentiment in the retail sector declined considerably in both the EU and eurozone and is now also at a record low level in the EU.
The construction confidence indicator also dropped substantially, in both regions, although it is still above its all-time low reached in October 1993.
Reflecting the widespread deterioration in economic sentiment, all EU countries reported weakening sentiment. Among the large member states, confidence in The Netherlands decreased the most (-13.2 points), followed by Italy (-9.9), France (-8.2), Spain (-6.3), Germany (-5.3) and Poland (-4.5). The confidence indicator fell less significantly in the UK (-0.6), although from a very low basis, and it now stands at its lowest since 1985.
Employment expectations fell sharply in both industry and services. Consistent with that, consumers' unemployment expectations increased significantly. Managers' selling price expectations as well as consumers' price expectations decreased considerably, continuing the trend under way since summer 2008.
The financial services confidence indicator, not included in the ESI, interrupted the fats decline it started in October. It remained unchanged at a very low level in the EU, while it slightly improved in the eurozone. Mangers assessed the business situation over the past eight months as broadly unchanged while the majority of managers interviewed expected demand for their financial services to improve in the next three months after worsening over the previous three months.
The Directorate-General for Economic and Financial Affairs conducts regular harmonised surveys for different sectors of the economies in the European Union. They are addressed to representatives of the industry (manufacturing), the services, retail trade and construction sectors, as well as to consumers. These surveys allow comparisons among different countries' business cycles.
The ESI fell by seven points in the EU and by 7.8 points in the eurozone, to 63.5 and 67.1 respectively. This puts the ESI for both the EU and eurozone at its lowest since the current series was launched in January 1985.
In both the EU and the eurozone, the decline in the overall ESI reflects a general decrease in sentiment. The industrial and consumer confidence indicators fell significantly again and and reached their lowest level since January 1985 in both blocs. The services confidence indicator marks a new record low level for both regions since the introduction of the survey 12 years ago. Sentiment in the retail sector declined considerably in both the EU and eurozone and is now also at a record low level in the EU.
The construction confidence indicator also dropped substantially, in both regions, although it is still above its all-time low reached in October 1993.
Reflecting the widespread deterioration in economic sentiment, all EU countries reported weakening sentiment. Among the large member states, confidence in The Netherlands decreased the most (-13.2 points), followed by Italy (-9.9), France (-8.2), Spain (-6.3), Germany (-5.3) and Poland (-4.5). The confidence indicator fell less significantly in the UK (-0.6), although from a very low basis, and it now stands at its lowest since 1985.
Employment expectations fell sharply in both industry and services. Consistent with that, consumers' unemployment expectations increased significantly. Managers' selling price expectations as well as consumers' price expectations decreased considerably, continuing the trend under way since summer 2008.
The financial services confidence indicator, not included in the ESI, interrupted the fats decline it started in October. It remained unchanged at a very low level in the EU, while it slightly improved in the eurozone. Mangers assessed the business situation over the past eight months as broadly unchanged while the majority of managers interviewed expected demand for their financial services to improve in the next three months after worsening over the previous three months.
The Directorate-General for Economic and Financial Affairs conducts regular harmonised surveys for different sectors of the economies in the European Union. They are addressed to representatives of the industry (manufacturing), the services, retail trade and construction sectors, as well as to consumers. These surveys allow comparisons among different countries' business cycles.