After two months of improvements, the European Commission ESI slipped back in the March dated report for both the EU and the sub-set of the Euro-zone. However, industry confidence edged up and construction was unchanged, with the fall in the ESI driven by consumers, services and the retail trade.
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 March 2025, the data collection period ran from 1st to 21st of that month, so the trends really refer to February; similarly, the past 3-months cover December 2024 to February 2025 and the coming period runs from March to May.
The slight increase in industry confidence was the result of an improvement in managers’ production expectations over the coming 3 months, with the other two factors in the calculation – the current level of order books and stocks of finished products – almost unchanged. The survey generating this data has two other questions which are not included in the calculation; both output over the previous 3 months and export order books were also very close to the previous month’s levels.
Amongst the largest EU economies, the ESI improved in Spain (+1.1 points), edged up in Germany (+0.3) and Poland (+0.2) and was unchanged in the Netherlands; it fell sharply in both France (-2.1) and Italy (-2.0).
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, 14 Member States (up from 11 in the February dated survey – helped by Ireland coming back into the analysis) have an ESI at or above 100 in this survey – these were Bulgaria, Croatia, Cyprus, Czechia (new this month), Denmark, Greece, Ireland, Lithuania, Malta (also new this time), the Netherlands, Poland, Portugal, Romania and Spain. The EU candidate countries also participate in this survey, with Albania and Montenegro 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.