European Commission Economic Sentiment Indicator, Capacity Utilisation and Investment Survey, April 2022:  The European Commission (EC) draws from a range of surveys to construct confidence indicators for six sectors of the economy and then uses five of these (financial services is not used) make up its Economic Sentiment Indicator (ESI).  The other point to note is that although labelled as “April 2022” or “Q2-2022”, the data collection period was mainly in April so the data really refers to March or Q1-22.

There was a further fall in the headline ESI in both the EU and the Euro-zone although it remains above the long-run (2000 to date) average on which it is based.  With the exception of a small up-tick in February it has fallen consistently since its peak in October 2021.  This was driven by a reduction in the confidence calculation for industry, construction, retail trade and among consumers;  service industry confidence was flat and there was an improvement for the financial services industry.

For the industry sector, the modest fall in confidence – retail trade and construction saw much larger reductions – was driven mainly by a marked improvement in survey respondents views about the stocks of finished products;  unlike the PMI data where this adds to the index, the EC’s analysis regards this as a negative and so this increase reduces confidence.  There was a slight improvement in the assessment of current order books and expectations for production in the coming three months were broadly unchanged following a sharp drop in the previous survey.  This was accompanied by a sharp drop in output for the past three months although this question is not used in calculating confidence;  similarly, export orders books, which improved slightly, are not used in the index for the industry sector.

There is a significant range of outcomes for the major economies in the EU;  the ESI for Spain fell sharply, with a more modest reduction in France.  Confidence was broadly flat in Germany and the Netherlands, edged up in Poland and improved more markedly in Italy.  The ESI remains above the long-run average in most countries, although Cyprus, Latvia, Poland and Slovakia are exceptions to this trend within the EU;  among the candidate countries who are also participants in this survey, Albania, Montenegro, Serbia, and Turkey all have their ESI below the long-run average.

This is one of the quarterly reports which generates the capacity utilisation indicators – a noted above, although reported as Q2-2022, they really refer to the position at the end of Q1-2022.  The utilisation rate edged down in the EU but increased by a similarly small amount in the Euro-zone;  however, it has moved within a very narrow range over the past 4 quarters with none of the changes really that significant.

Among the larger countries, there was a noticeable fall in the capacity utilisation measure in Germany where it was back to the level we saw a year earlier;  there was a more modest fall in France which has been on a see-saw path over recent surveys and the measure ticked up in both Spain and Italy.  The UK is no longer part of this analysis but we saw from the CBI survey that we reported last week that the capacity utilisation here fell back while remaining above the long-run average.  Indeed, only France has capacity utilisation below its long-run average among a group that also includes Austrian, the Netherlands and Sweden.

Finally, this survey also includes the results of the bi-annual investment survey from the European Commission.  This really deserves analysis of its own so we will return to this next week.

You can download the EC report and statistical annex from their web-site at or you can request it from MTA.


European GDP, 1st Quarter 2022:  The preliminary flash estimate of GDP published by Eurostat shows quarter-on-quarter growth of +0.4% for the EU and +0.2% for the Euro-zone – in both cases, this is a notch down on the growth rates for the 4th quarter of 2021.  Compared to a year earlier, GDP in the EU has grown by +5.2%, with an increase of +5.0% for the Euro-zone thanks mainly to the growth recorded in the 2nd and 3rd quarters of 2021.

At this stage, we only have figures for a limited number of countries.  Germany recorded a quarter-on-quarter growth rate of only +0.2% although this does represent a reversal of the -0.3% decline in the previous quarter which means that they avoid a return to a recession.  However, France saw GDP flat in Q1-2022 and Italy which, like France had relatively strong growth at the end of 2021, had a decrease of -0.2% (Sweden was the only other country to see GDP contract at the start of this year).

The next update will be published on 17th May which will provide information about more countries.

For more details, you can download the Euro-indicators report from their website at (29 April).

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