In November, the Economic Sentiment Indicator improved further in both the European Union and the eurozone. The indicator increased strongly, climbing by 1.3 points to 105.2 in the EU and by 1.5 points to 105.3 in the eurozone.

These results were boosted by strong positive readings in Germany.

The Economic Sentiment Indicator is based on surveys conducted by the European Commission’s Directorate General for Economic and Financial Affairs.

A majority of member states reported either improvement or stabilisation in sentiment. Among the seven largest member states, Germany registered the most significant increase (+2.8), followed by Italy (+1.4). Improvement was less pronounced in the UK (+0.5) and in the Netherlands (+0.4), while sentiment remained broadly stable in Spain, Poland and France.

In Germany, France, the UK and the Netherlands the ESI is above its long-term average.

The sentiment figures for Malta were not available.

Sentiment in services which increased markedly by 2.1 in the eurozone and by 3.0 in the EU was the main contributor to the overall improvement. Most respondents in this sector reported brighter assessments of demand and business situation over the past three months.

Confidence in industry improved by 0.9 points in the eurozone and 0.7 points in the EU. This was mainly driven by buoyant German industry. Gains in industrial confidence in the eurozone reflected improvements in order books and production expectations. Export orders books have also become more upbeat, in both the EU and the euro area.

Confidence among consumers gained momentum in the eurozone (+1.5), while it increased only marginally in the EU (+0.5). Increased optimism about the general economic situation and a significant easing of unemployment fears in Germany contributed to the overall improvement.

Sentiment in the retail sector decreased by 0.7 point in the EU and remained broadly unchanged in the eurozone (-0.4).

After improvements in September and October, sentiment in construction set back in both regions (-0.9 the EU and -1.0 in the eurozone), mainly owing to sizeable negative readings in Spain.

Confidence in financial services – not included in the ESI – rebounded after two consecutive drops in both the EU and the eurozone (+2.6 and +1.9 points respectively). According to the six-monthly industrial investment survey, which was carried out in October and November of 2010, managers expect to increase their investment volumes by four per cent in the EU and by two per cent in the eurozone in 2011 as compared to investment in 2010.

The Directorate General for Economic and Financial Affairs conducts regular harmonised surveys for different sectors of the economies in the European Union (EU) and in the applicant countries. They are addressed to representatives of the industry (manufacturing), the services, retail trade and construction sectors, as well as to consumers.