The European Union’s (EU) economic sentiment indicator (ESI) decreased slightly by 0.5 points to 104.1 in May this year, while it stayed broadly unchanged in the euro area (plus 0.1 points to 105). The ESI’s slight decrease in May in the EU was due to weaker confidence among industry managers and, to a lesser degree, consumers. Services, retail trade and construction confidence remained virtually unchanged.

Amongst the largest EU economies, the ESI rose markedly in Spain (plus 4.1 points) and, to a lesser extent, in France (plus 1.5 points) and Italy (plus 0.8 points), while it remained virtually unchanged in Germany (plus 0.2 points). Sentiment clouded over in Poland (minus 0.8 points) and the Netherlands ( minus 1.2 points), said an official press release.

Industry confidence weakened for the third month running (minus 1.4), as managers’ assessments of the current level of overall order books saw the sharpest deterioration in two years. Production expectations worsened only slightly, while managers’ appraisals of the stocks of finished products stayed virtually unchanged.

Services confidence stayed broadly unchanged (plus 0.1) in May for the second month in a row. While managers’ appraisals of the past business situation and past demand improved, their demand expectations clouded over.

Consumer confidence weakened mildly (minus 0.4). While consumers’ views on their past financial situation and expectations about the general economic situation worsened, their intentions to make major purchases stabilised and expectations about their future financial situation saw some further relief.

After two months of sharp declines, retail trade confidence stayed virtually unchanged in May (plus 0.1). While managers’ expected business situation clouded over, their views on the past business situation recovered partially from last months’ deteriorations. The level of stocks was assessed as less scarce, hinting at some further moderation of the prevailing supply constraints.

Fibre2Fashion News Desk (DS)

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