ESI indicator declines both in the EU and the euro area

The Economic Sentiment Indicator (ESI), fell by 1.5 points in the  EU and by 0.8 points in the euro area, in September, leaving these values in 85.2 and 87.7 respectively. In the EU, the ESI reached its lowest level since December 1993, while for the euro area it goes back to 2001 values.

According to the Directorate-General for Economic and Financial Affairs, in both the EU and the euro area, the overall decrease in sentiment was characterised by a fall in confidence in industry, services and construction, whereas consumer confidence was unchanged after a rebound in August, and confidence in retail trade improved slightly.

The financial services confidence indicator – not included in the ESI – decreased slightly in the EU, while it registered a minor improvement in the euro area. In both areas, the indicator stands below its long-term average.

A majority of countries reported a fall in their ESI. Among the large Member States, Italy and France registered a slight increase (+0.5 both), while drops in sentiment were registered in the Netherlands ( 5.2), the UK (-4.2), Spain (-1.4), Germany ( 1.3) and Poland (-1.2). Among these countries, the ESI stands above its long-term average only in Poland.

Economic Sentiment Indicator (ESI)

The Economic Sentiment Indicator (ESI) is a composite indicator made up of five sectoral confidence indicators with different weights: Industrial confidence indicator, Services confidence indicator, Consumer confidence indicator, Construction confidence indicator Retail trade confidence indicator. Confidence indicators are arithmetic means of seasonally adjusted balances of answers to a selection of questions closely related to the reference variable they are supposed to track (e.g. industrial production for the industrial confidence indicator). Surveys are defined within the Joint Harmonised EU Programme of Business and Consumer Surveys. The economic sentiment indicator (ESI) is calculated as an index with mean value of 100 and standard deviation of 10 over a fixed standardised sample period. Currently, mean and variance are fixed over the period 1990-2006.