The ESI compiled by the European Commission picked-up in July for both the EU and the Euro-zone. This was driven by strong confidence levels for industry, services and retail trade, with a marginal improvement for consumers which was partly balanced by a dip in the construction sector. The rate of capacity utilisation edged up in the EU but was unchanged for the Euro-zone.
The European Commission draws from a range of surveys to construct confidence indicators for five sectors of the economy and then uses these to calculate up its Economic Sentiment Indicator (ESI) which is converted to an index based on the long-run average. You should note that although dated July 2025, the data collection period ran from 1st to 23rd of that month, so the trends really refer to June, with the 3-month blocks covering April to June (past) and July to September (future).
The calculation of industry confidence comes from the responses to three questions and the improvement was mainly due to better expectations for production over the coming 3 months, with a slight improvement in the current level of order books, while stocks of finished products were broadly stable. There are a couple of other questions that are reported but are not included in the calculation and these had divergent trends; while output over the previous 3 months worsened, the assessment of export order books edged up this month.
Amongst the largest EU economies, the ESI improved significantly in France (+2.4 points) and Spain (+2.2), with Germany also improving (+1.2) and Italy (+0.4) slightly better. There was a slight decrease (-0.2 points) in the Netherlands, with only Poland (-2.1) noticeably weaker.
As noted above, the ESI is calculated against the long-run average, so we can look at the position of the individual countries against their own historical situation – this is the best way to compare between countries. Despite the overall improvement, only 8 Member States have an ESI at or above 100 in this survey – these were Bulgaria, Croatia, Cyprus, Greece, Ireland (new this month at exactly the 100 level), Lithuania, Portugal and Spain; Malta and Poland fell back below their respective long-run averages in “July”. The EU candidate countries also participate in this survey and Albania and Montenegro were also above the threshold.
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 2025 box) or you can request it from MTA.