Economic Sentiment Down In EU and Euro Area Sep 1, 2011

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The August the Economic Sentiment Indicator (ESI) declined by 5.0 points to 97.3 in the European Union (EU) and by 4.7 points to 98.3 in the euro area, according to the latest data from the European Commission Directorate-General for Economic and Financial Affairs.

The decline resulted from a broad-based deterioration in sentiment across the sectors, with losses in confidence being particularly marked in services, retail trade, and among consumers. Only the construction sector in the euro area recorded an improvement.

• Germany: -5.7 points
• UK -5.6
• Poland -3.6
• Netherlands -3.0
• Italy -0.7
• Spain: The ESI remained broadly unchanged at -0.3

The ESI remains above its long-term average only in Germany.
Although confidence in industry remains above its long-term average, it worsened by 2.6 points in the EU and by 3.8 points in the euro area, on the back of a drop in managers' appraisal of the level of order books and production expectations. An increasing number of managers assessed their stocks as being too large. Managers were also more pessimistic about their export order books and past production.

Confidence among consumers worsened in both the EU (-4.4) and the euro area (-5.3). In both regions consumers were pessimistic about the future general economic situation and expressed higher unemployment fears. Their expected financial situation and their saving expectations were also assessed more negatively than in the past months.

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