The European Commission’s Economic Sentiment Indicator (ESI) declined slightly in September, falling by -0.4 points in the EU and -0.5 points in the euro area to 97.9 in both cases, moving away from the long-term average of 100 after trending upwards since May.
The overall decline in sentiment was driven mainly by weaker consumer confidence, which fell by -0.8 points as consumers became more pessimistic about their household finances, the wider economic outlook and their willingness to make major purchases. Services and retail trade confidence remained broadly stable, while construction confidence improved slightly.
In contrast, industry confidence continued to strengthen, increasing by +1.0 point. Manufacturers reported improved production expectations and a better assessment of their current order books. Assessments of past production also improved, while views on export order books became less pessimistic. However, managers’ assessment of finished goods stocks deteriorated noticeably.
Sentiment varied across the major EU economies. The ESI fell in France (-1.7 points) and Italy (-0.8), while Spain recorded a significant increase of +3.4 points. Germany (+0.6) and the Netherlands (+0.5) also recorded modest improvements.
The Economic Uncertainty Indicator (EUI) increased by +1.2 points to 18.4, ending a four-month decline. Uncertainty about the future business situation increased among managers in both industry and services, while consumers also became more uncertain about their future financial situation.
Overall, September’s figures present a mixed picture for the European economy. Industrial sentiment continued to improve, supported by better production expectations and order-book assessments, but this was offset by weaker consumer confidence and a renewed increase in economic uncertainty. For manufacturers, the continued improvement in industry confidence provides some positive signals, although the wider economic environment remains unsettled.
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