The European Commission ESI picked up again in the report dated February and is now at its highest since April 2023 for the EU and March 2024 for the Euro-zone. The strengthening this month was driven by higher levels of confidence for industry and consumers and came despite a fall for the construction industry.
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.
The improvement in industry confidence came as all three components of the calculation – production over the coming 3 months, the current level of order books and the assessment of stocks of finished products – improved compared to the previous month. The survey includes two other questions which are not included in the calculation – output over the previous 3 months and export order books – and both of these also improved in the latest results.
Amongst the largest EU economies, the ESI improved significantly in Poland (+3.4 points), with France (+2.3), Germany (+1.2%) and the Netherlands (+0.8) also showing an improvement. With Italy broadly neutral (-0.4 points), only Spain (-2.0) saw a significantly weaker result.
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. Overall, 11 Member States (up from 9 in January* with Italy dropping out of the list but Netherlands, Poland and Romania moving up above the threshold) have an ESI at or above 100 in this survey – these were Bulgaria, Croatia, Cyprus, Denmark, Greece, Lithuania, the Netherlands, Poland, Portugal, Romania and Spain. The EU candidate countries also participate in this survey and there have also been changes here with only Albania and Montenegro above the threshold – North Macedonia and Serbia both saw their ESI fall below 100.
* Note that although dated February 2025, the data collection period ran from 1st to 20th of that month, so the trends really refer to January; therefore, the past 3-months cover November 2024 to January 2025 and the coming period runs from February to April.
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.