The Economic Sentiment Indicator (ESI) for the EU and the euro area declined in July, but remains above its long-term average. In the EU, it fell to 102.4 and to 103.2 in the euro area. In the EU confidence declined notably in industry, retail trade and among consumers, with marginal falls in services and an improvement in the construction sector. In the euro area the fall resulted from a decline in confidence in all sectors, with strong losses in industry and services.

With regard to industry, this sector contributed negatively to overall sentiment in both regions, although confidence remains firmly above its long-term average in industry in both the EU and the euro area. Industrial confidence decreased by 2.6 points in the EU and by 2.4 points in the euro area. In addition, sentiment in services decreased by 2.2 the euro area, but less so in the EU (-0.4).

The worsening of sentiment in the retail sector was more pronounced in the EU (-2.6) than in the euro area (-0.9). Also, confidence among consumers decreased in both regions, reflecting mainly increased pessimism about the future general economic situation and unemployment. As the Economic Sentiment Indicator (ESI) results on April, sentiment in construction decreased in the euro area (-1.0), while improving in the EU (+0.9).

Most Member States recorded a drop in sentiment. Among the seven largest EU Members States are: Italy (-4.5), followed by Spain (-2.7), Netherlands (-2.1), Germany (-1.8), the UK (-1.4) and France (-0.5), while it improved slightly in Poland (+0.4). In July, the ESI remains above its long-term average only in Germany and France.