The Directorate General for Economic and Financial Affairs of the European Commission announced yesterday (Jan. 7) that the Economic Sentiment Indicator (ESI) rose once again in December to 92.0 (+4.1 points) in the EU and to 91.3 (+2.5) in the Eurozone
It has improved in both areas for nine consecutive months since its trough in March
2009, though it still remains below its long-term average.
The majority of Member States reported a general improvement in sentiment.
Among the largest Member States, the UK reported a sharp increase (+8.2 points), followed by France (+4.1), while the improvements were less marked in Italy (+2.9), Germany (+1.7) and Spain (+1.2). Sentiment in the Netherlands remained unchanged and decreased slightly in Poland (-0.6).
Sentiment in industry increased by 3 points in both the EU and the Eurozone and remained the main contributor to the overall improvement.
While most respondents in this sector reported strong improvements in their order books, they appear to have scaled back their production expectations. The declining level of stocks, especially in the automotive sector, confirmed further destocking.
Services increased by 1 point in the Eurozone and by 6 points in the EU, the latter owing to a strong increase in UK services sentiment.
Confidence among consumers improved by 1 point in both areas, as unemployment fears faded.
Mirroring this outlook, employment expectations picked up in industry and services.
No major development was noted in retail, which remained unchanged in the EU and increased by 1 point in the Eurozone.
Construction declined by 1 point in the EU and by 2 points in the euro area.
Confidence in financial services – which is not included in the ESI – remained broadly unchanged in the EU and declined by 2 points in the euro area, where managers' assessment of the business situation over the past three months was significantly more negative than in last month's survey.