The Economic Sentiment Index (ESI) compiled by the European Commission was broadly stable in September* for the EU and edged down slightly in the Euro-zone. At the EU level, this was a balance between improved confidence in construction and among consumers and a decline for the industry sector.
The European Commission (EC) 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.
The decline in industry confidence that we noted in the introduction came as a result of a significant fall in the assessment of current order books and, to a lesser extent, a reduction in stocks of finished products, while expectations for output over the coming 3 months were almost unchanged.
There are two other questions for the industry sector which are not included in the confidence calculation; both production over the previous 3 months and export order books worsened compared to the previous month.
Amongst the largest EU economies, the ESI improved in Poland (+2.0), Spain (+1.9), Italy (+1.2) and the Netherlands (+0.5) but worsened in France (-1.4 points – there may be a hangover element here from the Olympics and Paralympics in August) and Germany (-1.2).
As the ESI is calculated against the long-run average, we can look at the position of the individual countries against their own historical situation, which is the best way to compare between countries. In the latest report, 13 of the 26 Member States with data (Ireland does not participate in this survey) have an ESI above 100 in this survey – these were Bulgaria, Croatia, Cyprus, Denmark, Greece, Italy (new this month), Lithuania, Luxembourg (also new this time), Netherlands, Poland, Portugal, Romania and Spain; Slovakia dropped below the threshold in September*. The EU candidate countries also participate in this survey, with Albania, Montenegro, North Macedonia (new this month) and Serbia also having an ESI reading above their respective long-run averages.
* Note that although dated September, the data collection period was from 1st to 20th of that month so the trends really refer to August and the 3-month periods of June to August and September to November.
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 2024 box) or you can request it from MTA.