Last month, the Economic Sentiment Indicator (ESI) index increased by almost 1 percent to 97.8 in the eurozone and by 1.1 points across the whole European Union. Although the increasing trend of the indicator has been around for a couple of months, the magnitude and sectoral scope of the improvement has moderated recently. The ESI index is a composite indicator made up of five sectoral confidence indicators with different weights: Industrial Confidence Indicator, Services Confidence Indicator, Consumer Confidence Indicator, Construction Confidence Indicator, and Retail Trade Confidence Indicator. The indicator was developed to measure economic moods of the citizenry of the European Union.
In the eurozone, the improvements have been driven mainly by rising confidence in industries and sectors, but to a lesser extent among consumers. On the other hand, trust in services and retail is still slumbering. Most notably, ESI increases in three out of five major economies – the Netherlands, France, and Germany. In wider Europe, the impact of ESI was somewhat more positive and different in structure. Whereas the component of trust in services decreased in the currency block, it increased markedly in the Union. Confidence in retail was as low as in the euro area, whilst consumers also remained unchanged. The betterment in the ‘non-eurozone’ countries occurred thanks to the significant enhancement in the biggest non-euro economy – the United Kingdom. In Britain, an increase for services played a key role.
As to manufacturing, managers’ assessments of developments in new orders have enhanced significantly, and their export expectations have been revised accordingly. Yet, managers felt that the competitive position of the EU in global markets have been worsened lately compared to the previous survey carried out in July 2013.
