In April, the Economic Sentiment Indicator (ESI) again rose and exceeded its long term average, reaching 101.9 (+2.1 points) in the EU and 100.6 (+2.7) in the euro area. However, coming out of a deep recession clearly means that further sustained improvements will be required for economic activity to reach its pre-crisis levels.

Economic sentiment indicator (s.a.)

EU: April 101.9
Euro area: April 100.6

The majority of the Member States reported across-the-board improvements in sentiment. Among the largest Member States, Germany registered another substantial increase (+4.3). Improvements were registered in France (+2.0), Italy (+1.5), Spain (+1.1), the Netherlands (+1.1) and the UK (+0.8), while Poland remained broadly unchanged (-0.1).

Driven by substantially better order books, sentiment in industry improved by 2 points in the EU and by 3 in the euro area. Services and retail also registered significant improvements and consumer confidence regained its momentum, largely due to easing unemployment fears in Germany. In contrast, sentiment in construction remained very weak.

The quarterly manufacturing survey indicates an increase in capacity utilisation, particularly so in Germany. It now stands at about the 75% mark in both the EU and the euro area, still considerably below the long-term average (81%).

According to the biannual industrial investment survey, which was carried out in March and April of this year, managers in the EU and the euro area expect real investment to drop by 2%. Although still negative, the outlook for this year has improved when compared to the expectations reported half a year ago. Nonetheless, there are significant differences among countries: managers in Germany, France and the UK expect to increase investment in 2010, which contrasts with sizable expected reductions in Italy, Spain and Poland.

Confidence in financial services – not included in the ESI – registered strong gains. It improved by 9 points in the EU and by 6 points in the euro area.

Industrial confidence indicator (s.a.)

EU: April -7
Euro area: April -7

Service confidence indicator (s.a.)

EU: April 4
Euro area: April 5

Consumer confidence indicator (s.a.)

EU: April -12
Euro area: April -15

Retail trade confidence indicator (s.a.)

EU: April 0
Euro area: April -1

Construction confidence indicator (s.a.)

EU: April -28
Euro area: April -25

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

EU: April 26
Euro area: April 25