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28 March 2019

March 2019: Economic Sentiment slightly down in both the euro area and the EU


In March 2019, the Economic Sentiment Indicator (ESI) decreased slightly in both the euro area (by 0.7 points to 105.5) and the EU (by 0.4 points to 105.0)

Euro area developments

The deterioration of euro-area sentiment resulted from markedly lower confidence in industry and, to a lesser extent, services, while confidence improved in retail trade and construction and remained broadly stable among consumers. Amongst the largest euro-area economies, the ESI rose markedly in Spain (+2.3), while it decreased sharply in Germany (−1.8) and the Netherlands (−1.3), and remained broadly unchanged in France (+0.2) and Italy (−0.2).

The marked decrease in industry confidence (−1.3) resulted from managers' more pessimistic views on all three components, i.e. production expectations, the current level of overall order books and the stocks of finished products. Managers' assessments of the past production and export order books – which are not included in the confidence indicator – deteriorated significantly too. The decline in services confidence (−0.8) was driven by managers' significantly more pessimistic views on past and expected demand, while their assessment of the past business situation held up. The stability of consumer confidence (+0.2) resulted from households’ more positive assessments of their past financial situation and their expectations about the general economic situation, partly offset by a slight decrease in their intentions to make major purchases. Consumers’ expectations of their future financial situation remained broadly stable. The strong increase in retail trade confidence (+1.5) resulted from more positive views on all its components: the present and expected business situation, and managers’ assessment of the adequacy of the volume of stocks. Increasing construction confidence (+0.9) was fuelled by managers' more optimistic views on the level of order books, while their employment expectations worsened. Finally, financial services confidence (not included in the ESI) increased sharply (+9.2), reflecting strong improvement in all its components (i.e. managers' appraisals of past and future demand and their assessment of the past business situation).

Employment plans clouded over in construction and, more significantly so, in industry, while remaining broadly unchanged in services and edging up in retail trade. Selling price expectations increased in services, stayed broadly unchanged in retail trade and declined sharply in construction and industry. Also consumer price expectations declined in March.

EU developments

Behind the somewhat milder decline of the headline indicator in the EU (−0.4) was a partial rebound of sentiment in the largest non-euro area EU economy, the UK (+1.6), where sentiment had plummeted in February. Sentiment improved slightly also in Poland (+0.4). In line with the euro area, industry confidence worsened markedly, consumer confidence held up and retail trade confidence rose; however, EU confidence improved also in services, while it worsened in construction. As in the euro area, financial services confidence shot up.

Managers' employment expectations worsened for industry, retail trade and construction and remained stable in services. EU-wide price expectations declined in industry, retail trade and construction, while they stayed broadly stable in services. 

Full press release



© Eurostat


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