Economic sentiment indicator rises in EU, euro area in Dec 2023

Employment plans among retail trade executives remained virtually flat. Consumers’ unemployment expectations, which are not included in the headline indicator, also remained broadly stable.

In the EU, the ESI improvement was driven by higher confidence among consumers and managers in retail trade, services and construction, while confidence in industry remained broadly unchanged.

Amongst the largest EU economies, the ESI improved in Italy (plus 2.6), Spain (plus 2.4) and Germany (plus 2.4), while it eased in the Netherlands (minus 1.1) and, to a lesser extent, in France (minus 0.5). Sentiment remained broadly stable in Poland (plus 0.2).

Industry confidence remained broadly stable (plus 0.1) for the fifth consecutive month.

While managers’ assessments of the current level of overall order books continued the decline observed since May 2023, fewer managers considered the stocks of finished products as too high/above normal and their production expectations remained virtually unchanged.

Of the questions not entering the confidence indicator, managers’ views on changes in past production improved, while the assessments of export order books worsened.

Consumer confidence increased further (plus 1.5), driven by an improvement of all its components, i.e. consumers’ views of their household’s past and future financial situation, their expectations of the general economic situation in their country, and their intentions to make major purchases.

Retail trade confidence improved (plus 1.1), as views about the past business situation brightened and stocks were less often considered as too high/above normal. By contrast, views on the future business situation deteriorated.

Fibre2Fashion News Desk (DS)