European GDP, 3rd Quarter 2023:  The preliminary flash estimate of GDP from Eurostat for the 3rd quarter of 2023 shows an increase of +0.1% for the EU but a fall of -0.1% for the Euro-zone.  This means that compared to the 3rd quarter of 2022, seasonally adjusted GDP has grown by just +0.1% in both areas.

This very early release only has data for 13 of the EU Member States;  of these, 4 (Belgium, Spain, France and Latvia – which had the strongest growth) saw a positive reading for GDP growth, 2 (Italy and Sweden) had no change and the other 7 reported that their economies had contracted.

Of these, Estonia and Austria also had a negative trend in the 2nd period of the year and are, therefore, technically in a recession (Estonia’s GDP contracted in each of the previous 4 quarters).  The largest quarter-on-quarter fall in GDP was in Ireland but this has to be looked at very carefully as the impact of a large number of European headquarters operations here (for tax reasons) make their GDP very volatile.  The other countries whose GDP provisionally fell in Q3 were Czechia, Germany, Lithuania and Portugal.

For more details, you can download the Euro-indicators report from their website at (31 October).


European Commission Economic Sentiment Indicator and Capacity Utilisation, October 2023:  The European Commission (EC) draws from a range of surveys to construct confidence indicators for five sectors of the economy and then weights these to make up its Economic Sentiment Indicator (ESI).  The other point to note is that although labelled as “October 2023” or “Q4-2023”, data collection ran from 1st to 23rd October so the data really refers to September or Q3-2023.

The ESI, which covers the whole economy, was broadly stable in both the EU (+0.2 points) and the Euro-zone (-0.1 points) and it remains well below the long-run average in both areas.  Note that the indicator is based on the long-run average which is adjusted at the end of each calendar year, so currently running from 2000 to 2022.  By sector, a fall in confidence in the retail trade was balanced by an improvement for the service sector, while industry, construction and consumers’ confidence were broadly stable.

In the industry sector, the confidence measure is made up of three questions which had varying outcomes in the latest survey;  stocks of finished products were increasingly assessed as too small/below normal (this indicates higher demand and may, if continued, suggest an end to the de-stocking cycle), while managers’ assessment of the current level of overall order books deteriorated and managers’ expectations for future production were broadly unchanged.  In the two other questions which are not part of the calculation for industry confidence, managers assessed developments in production over the previous 3 months more negatively, but their assessment of export order books improved.

Among the largest EU economies, the ESI improved in Spain, Poland and, to a lesser extent in Germany, was broadly unchanged in the Netherlands but fell sharply in France and more modestly in Italy.

The ESI is calculated as an index which is based on its long-run average;  Across the EU, there were 7 countries whose ESI was above 100 – Bulgaria, Croatia, Cyprus, Greece, Malta, Romania and, returning to this list in this survey, Spain.  This survey also covers the EU candidate countries and Albania and Montenegro both have an ESI in positive territory.

This is also one of the surveys which gives us data for capacity utilisation (CU) in manufacturing.  The rate of CU fell in both the EU and the Euro-zone;  it was at its lowest since the survey dated Q1-21 (see note above) and the one dated Q4-20 respectively.

Most of the major industrial economies also saw the CU rate fall – the main exception was in Spain where it was at its highest rate for 5 quarters, with France and Hungary seeing a broadly stable rate compared with the previous survey.  Direct comparisons of the CU rates between countries are not valid and it is important to look at where each country is in relation to its own history;  the EU, Euro-zone and most countries current rate of CU is significantly below the respective long-run average (back to 2000) – here the exceptions are Italy and Spain which are a little above the trend level, Sweden which is broadly in line and the Netherlands which is only a little lower.

You can download the EC press release and statistical annex from their web-site at (open the drop down menu for 2023) or you can request it from MTA.

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