The Economic Sentiment Indicator in March was broadly unchanged at 107.4 in the EU, while it decreased by 0.6 to 107.3 in the eurozone, according to the latest business and consumer survey results published by the European Commission.
The overall decline in the eurozone came about as a result of broadly unchanged sentiment in industry and weakening confidence in the other business sectors and among consumers. In the EU, industry and services remained on an upward trend offsetting the declines observed in retail trade, construction and among consumers.
Most member states recorded a decline in sentiment. Among the seven largest member states, Poland (-3.1 points), Spain (-3.0) and Germany (-0.7) reported decreases, while the Netherlands (+3.1), the UK (+2.7) and France (+0.9) improved. Meanwhile, Italy (+0.1) remained broadly stable. The ESI is above its long-term average in five of the seven largest member states. Poland went back to just below its long-term average, while Spain remained well below it. In Malta, the ESI declined by 1.6 points.
Sentiment in industry increased further – by 0.6 points – in the EU, while remaining broadly unchanged in the eurozone. The difference between the two regions is mainly explained by a strong increase in the UK (+3.0 points).
Production expectations decreased both in the EU and in the eurozone, despite an improvement in the assessment of the level of order books and an increasing number of managers considering their stocks as not sufficient. Managers were also slightly more pessimistic about their export order books.
Sentiment in services rose in the EU (+0.6) and decreased in the eurozone (-0.4). Managers were more positive about expected demand but more pessimistic about demand observed in the past months. Sentiment in construction decreased in both the EU (-1.6) and the eurozone (-0.8), partly offsetting the improvement registered in February. The indicator remains at very low levels in both regions.
Sentiment in the retail sector weakened in both the EU (-0.3) and the eurozone (-1.3). Also, confidence among consumers decreased in both the EU (-0.4) and the eurozone (-0.6), reflecting more pessimism about the future general economic situation, consumers’ future financial situation and their possibility to save money in the next 12 months. In contrast, consumers reported slightly decreasing unemployment fears.
Confidence in financial services – not included in the ESI – decreased significantly in both the EU (-2.1) and the eurozone (-5.7), mainly because of a weaker assessment of past and expected demand evolution.