IP/07/112
Brussels, 31 January 2007
January 2007: Economic sentiment weakens in both the EU and the euro area The Economic Sentiment Indicator (ESI) went down in both the EU and the euro area in January. The indicator decreased by 1.7 points in the EU and by 0.6 points in the euro area, to 110.7 and 109.2 respectively. Economic sentiment indicator (s.a.) EU: Jan. 110.7
Euro area: Jan. 109.2
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Developments in the confidence indicators of the various sectors were in general rather subdued. The EU registered declined confidence in the industry sector, the services sector and in the construction sector, while confidence in retail trade and among consumers remained unchanged. In the euro area, confidence decreased somewhat in all sectors apart from the services sector where confidence remained stable. Despite the small decline recorded in January, all sectoral confidence indicators in both the EU and the euro area stay above their historical averages.
At the individual country level, the picture is mixed. Among the large Member States, confidence improved in Germany (+0.9) and Poland (+1.4), while it decreased in France (-1.0), Italy (-2.3), Spain (-1.9) and in the UK (-6.8).
Industrial confidence indicator (s.a.)
EU: Jan. 4
Euro area: Jan. 5
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In January, the industrial confidence indicator decreased somewhat in both the EU and the euro area. In both areas, the indicator remains, however, close to the peak recorded in 2000.
In both the EU and the euro area, managers’ assessment of order books and stocks of finished products turned less positive. While managers' production expectations remained stable in the EU, they improved slightly in the euro area.
Among the large Member States, industrial confidence either fell or remained unchanged. Germany, Poland and Spain recorded unchanged confidence, whereas managers in France (-1), Italy (-3), and in the UK (-6) became less optimistic.
Service confidence indicator (s.a.)
EU: Jan. 20
Euro area: Jan. 20
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Since April 2006, the service confidence indicator in both the EU and the euro area has been above its long-term average. In January, the indicator decreased marginally in the EU and increased slightly in the euro area.
The components of the confidence indicator showed diverse developments. In both the EU and the euro area, managers turned more positive as regards the current business situation, while they became less optimistic regarding the recent and expected evolution of demand.
Among the large Member States, the service indicator is above its long-term average in all countries except Germany and Spain. In January, the indicator decreased significantly in the UK (-8) and to a lesser extent also in Spain (-3) and France (-1). Germany (+3) and Poland (+5) registered a surge in confidence, while the service confidence indicator remained stable in Italy.
Consumer confidence indicator (s.a.)
EU: Jan. -6
Euro area: Jan. -7
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In January, consumer confidence was unchanged in the EU and declined somewhat in the euro area. In both areas, the indicator has been on an upward trend since mid-2005 and above its long-term average since the beginning of 2006.
The overall minor change of the indicator mirrors broadly stable underlying components. While consumers did not expect major changes in their own financial situation and their own savings over the next 12 months, they became more pessimistic with regard to the general economic situation. At the same time, their unemployment expectations improved slightly.
Even though the results are mixed at the country level, confidence worsened in most of the large countries, notably in Spain (-2), Italy (-3), Poland (-6) and in the UK (-1). In contrast, consumer confidence strengthened slightly in Germany (+1) and remained unchanged in France.
Retail trade confidence indicator (s.a.)
EU: Jan. 2
Euro area: Jan. -1
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In the EU, the retail confidence indicator was unchanged in January, while it declined marginally in the euro area. The indicator thus remains well above its long-term average level in both areas.
In the EU, retailers' assessments of both the current and the future business situation became slightly more optimistic, while their appraisal of the volume of stocks worsened compared with December. In the euro area, the general pattern is broadly the same except that retailers' assessment of the current business situation deteriorated.
The picture among the large Member States is quite diverse. Confidence among retailers improved in Germany (+1) and in the UK (+5), but worsened in France (-3), Italy (-2), Spain (-4) and Poland (-4).
Construction confidence indicator (s.a.)
EU: Jan. 1
Euro area: Jan. 1
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In the EU, the construction confidence indicator decreased slightly in both the EU and the euro area. The indicator still remains at a very high level, well above its long-term average.
For both the EU and the euro area, developments in the indicator are the result of diverging movements in the two underlying components. While managers' assessment of order books worsened, their employment expectations improved.
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Among the large countries, construction managers became more confident in Italy (+8) and to a lesser extent in Poland (+1), while they were less optimistic in Germany (-2), Spain (-6) and France (-3) and the UK (-3).
The next Business and Consumer Survey is due to be published on 28 February 2007. Full tables are available on:
http://europa.eu.int/comm/economy_finance/indicators/businessandconsumersurveys_en.htm
