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August 2014: Economic Sentiment falls in the euro area and the EU

European Commission

Press release

Brussels, 28 August 2014

August 2014: Economic Sentiment falls in the euro area and the EU

In August the Economic Sentiment Indicator (ESI) fell in the euro area (by 1.5 points to 100.6) and the EU (by 1.2 points at 104.6).

Economic sentiment indicator (s.a.)

August EU: 104.6 – Euro Area: 100.6

Euro area developments

After a broadly flat development over the last five months, August’s decrease shifted the euro area headline indicator back to its December 2013 level. Worsened sentiment resulted from deterioration in retail trade, consumer, industry, and, to a lesser extent, services confidence. Construction confidence remained broadly unchanged. Amongst the largest euro area economies, sentiment dropped significantly in Italy (-4.1), sending the ESI below its long-term average of 100, and in Germany (-1.9). Milder contractions were booked also in France (‑0.6) and the Netherlands (-0.8), while sentiment remained flat in Spain.

Weakened industry confidence (-1.5) was caused by managers’ more careful views on expected production, while assessments of the current level of overall order books and the stocks of finished products stayed broadly unchanged. By contrast, managers’ assessments of the level of past production and, to a lesser extent, export order books, which do not enter the calculation of the confidence indicator, improved. Services confidence slid somewhat (-0.5) owing to downward revisions of managers’ assessments of the past business situation and past demand, while their demand expectations remained virtually unchanged. The deterioration in consumer confidence (-1.6) was driven by more negative assessments of future unemployment and the future general economic situation, and, to a lesser extent, future savings and households’ future financial situation. Falling retail trade confidence (-2.3) was the result of mangers’ more pessimistic views on both the present and expected business situation together with a worsened assessment of the adequacy of the volume of stocks. The broadly flat development of construction confidence (-0.2) reflected downward revisions of the level of order books partially offset by a small improvement in employment expectations. The slight increase (+0.4) in financial services confidence (not included in the ESI) was backed by more positive appraisals of the past business situation and past demand, while demand expectations were revised downward.

Employment plans saw an upward revision in services, while they remained broadly unchanged in industry and construction and deteriorated in the retail trade sector. Selling price expectations increased in services and construction, but declined in the other two surveyed business sectors (industry and retail trade). Consumers’ price expectations were revised downward.

EU developments

The relatively more moderate decrease of the headline indicator in the two largest non-euro area EU economies, the UK (-1.1) and Poland (-1.0), resulted in a less severe contraction for the EU ESI (-1.2) compared to the euro area. EU construction confidence improved, while, as in the euro area, industry, retail trade, services and consumer confidence slipped. Financial services confidence booked a more robust improvement (+1.9).

Contrary to the euro area, EU-wide employment plans were revised downwards in industry but increased slightly in construction and remained flat in retail trade. EU price expectations were in line with those for the euro area apart from a broadly flat development in services.

Industrial confidence indicator (s.a.)

August EU: -3.3 – Euro Area: -5.3

Service confidence indicator (s.a.)

August EU: 7.5 – Euro Area: 3.1

Consumer confidence indicator (s.a.)

August EU: -6.4 – Euro Area: -10.0

Retail trade confidence indicator (s.a.)

August EU: 1.0 – Euro Area: -4.6

Construction confidence indicator (s.a.)

August EU: -22.3 – Euro Area: -28.4

Financial services confidence indicator (n.s.a.)

August EU: 19.0 – Euro Area: 14.6

The next Business and Consumer Survey is due to be published on 29 September 2014.

Full tables are available on:


Scheduled publication dates

Flash estimate

Final release EU, euro area and Member States

September 2014

22 September 2014

29 September 2014

October 2014

23 October 2014

30 October 2014

November 2014

20 November 2014

27 November 2014

Contacts :

Simon O’Connor (+32 2 296 73 59)

Vandna Kalia (+32 2 299 58 24)

Audrey Augier (+32 2 297 16 07)

For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by


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