The European Commission’s August Economic Sentiment Indicator (ESI) showed a further improvement in business and consumer confidence in August, rising to 98.2 (+1.0) in the EU and 98.4 (+1.3) in the euro area. Both were three-month highs.
The improvement was broad-based, with confidence strengthening in industry, services and retail trade, while sentiment in construction and among consumers was broadly unchanged.
Among the major EU economies, sentiment improved most strongly in France (+2.3), followed by Germany (+1.3) and Italy (+0.8). The ESI was broadly stable in the Netherlands (-0.1), but declined in Poland (-0.5) and Spain (-2.2).
Industry confidence edged higher (+0.4) in August, with manufacturers reporting stronger production expectations and lower stocks of finished products. These gains were partly offset by a more negative assessment of current order books. Outside the confidence indicator, manufacturers’ assessment of past production fell back following July’s sharp increase, while sentiment towards export order books also deteriorated somewhat.
Confidence in services increased more strongly (+1.1), supported by improvements across all three components: assessments of the past business situation and past demand, alongside expectations for future demand.
Elsewhere, retail trade confidence rose by +0.7, driven by significantly stronger expectations for business activity over the next three months and a more positive assessment of recent business conditions. Construction confidence was broadly unchanged (-0.2), as an improved assessment of order books was offset by weaker employment expectations.
Consumer confidence was also broadly stable (+0.1). Consumers were slightly less pessimistic about their household finances, although this was largely offset by reduced intentions to make major purchases and a more negative assessment of the future economic situation. You can download the EC report and statistical annex from their website at https://economy-finance.ec.europa.eu/economic-forecast-and-surveys/business-and-consumer-surveys/download-business-and-consumer-survey-data/press-releases_en (open the 2026 box) or you can request it from MTA.