Skip to main content


European Commission Economic Sentiment Indicator and Capacity Utilisation, July 2021:  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 included in the ESI) to compile its Economic Sentiment Indicator (ESI).  Because of the data collection periods, the reference month (July) is that of publication but the data really refers to June or, for the quarterly data, the figures relate to the levels, etc. in the 2nd quarter of 2021.

The ESI recorded its sixth successive month-on-month increase to set a new all-time high (the survey started in 1985), although the pace of that improvement moderated which suggests we may be approaching a peak.  This is also reflected in a more varied situation between the sectors;  confidence improved in both industry and services, was broadly flat in retail trade but fell back in in the construction sector and among consumers - financial services edged down on the previous month.

Similarly, there are mixed trends among the largest economies in the EU;  The ESI rose sharply in France and to a lesser extent in Italy and Spain, while sentiment in Germany and the Netherlands was broadly unchanged, with a modest fall in Poland.  Only the Czech Republic and Slovakia have the ESI below the long-run (since 2000) average.

For the industry sector (broadly manufacturing), the EC uses three questions to calculate the confidence indicator.  In the latest survey, while expectations about production over the coming three months was flat, both the assessments of total order books (improved to their highest level on record) and stocks of finished goods (falling) drove the indicator up.  Although not part of the calculation, the report notes that export order books and, to a lesser extent, output over the past 3 months both improved and are getting close to record levels.

This was one of the quarterly surveys that gives the data for capacity utilisation - this showed another improvement - the 5th in a row - for both the EU and the subset of the Euro-zone.  In both cases, the rate is now at its highest since the survey dated Q1-2019 (actually the end of 2018 - see note above).  Among the major manufacturing countries, the utilisation rate edged up in Germany but eased in both France and Spain;  however, the most notable movement was in Italy where there was a sharp increase and capacity utilisation is now at its highest there since the middle of 1995.

We no longer have the same series for the UK but the results from the CBI survey (which was the source of the EC’s calculations for the UK series) showed an increase in capacity utilisation to its pre-pandemic level but not yet quite to the heights achieved during 2017.

You can download the EC report from their web-site at or it can be requested from MTA.


UK Profitability, 4th Quarter 2020:  The Office for National Statistics (ONS) has published data for profitability of non-financial corporations for the first quarter of 2021.  The net rate of return for manufacturing was 9.7% - this is up on both the rate of 9.2% that was recorded at the end of 2020 and the rate of 8.3% from a year ago (Q1-2020).

However, it is lower than the 10.3% recorded in the 3rd quarter of 2020 and is below the long-run average level going back to the start of 2000.

The ONS Statistical Bulletin only publishes the data tables for this series and no longer has a commentary on the profitability series, so it is difficult to know what is driving these trends.  You can get the data tables from their web-site at (28 July) or you can request them from MTA.