EU: May 114.9
Euro area: May 111.9
Rising consumer confidence was the main driving force behind the improved ESI; it in turn was supported by improved services confidence in the EU and retail trade confidence in the euro area. In the EU, the other three sectors either remained stable (industry and construction) or declined marginally (retail trade). In the euro area, the confidence indicators for the industry, services and construction sectors all declined by one point.
At the individual country level, the picture is mixed, but a slight majority of countries showed an overall improvement in confidence. Among the large Member States, confidence improved in Germany (+0.9), France (+2.3), Poland (+0.3) and the UK (+3.7), while it decreased in Spain (-1.2) and Italy (-1.6).
Industrial confidence indicator (s.a.)
EU: May 6
Euro area: May 6
In May, the industrial confidence indicator remained stable in the EU and declined by one point in the euro area. Confidence in the two economic areas is still very high; the scores are just one point below their respective record levels of December 1994 in the EU and April of this year in the euro area.
In the EU, managers' production expectations and assessment of stocks of finished products remained unchanged, while their views of order books declined. In the euro area, all three components of the industrial confidence indicator worsened by one point.
Among the large Member States, industrial confidence remained unchanged in Germany and Poland, while managers became less optimistic in Spain (-2), France (-1) and Italy (-2). The only large Member State showing improved industrial confidence was the UK (+2).
Service confidence indicator (s.a.)
EU: May 23
Euro area: May 22
Only small changes were observed in the services confidence indicators in May. A small improvement in confidence was recorded for the EU, while it declined slightly in the euro area.
The components of the confidence indicator show that EU and euro-area managers' assessment of the current business situation remained unchanged. Regarding the recent evolution of demand, managers in the EU became more optimistic, while they became more negative in the euro area. For the euro area, this is the pivoting factor causing overall confidence to decline. Euro-area managers also became slightly more pessimistic regarding the expected evolution of demand, while EU managers' assessment was stable.
The subdued developments at the EU and euro-area levels mask a diverse pattern at the individual country level. Among the large Member States, services confidence improved in Germany (+1), Poland (+2) and the UK (+5), while it declined in Spain (-2), France (-1) and Italy (-2).
Consumer confidence indicator (s.a.)
EU: May -1
Euro area: May -1
In May, consumer confidence increased markedly in both the EU and the euro area. In both areas, the indicator has been on a fairly steady upward path since mid-2005, which has become even steeper during the spring of 2007. With the increase in May, both indicators are rapidly approaching an all-time high.
For both areas, all four components of the confidence indicator improved. Consumers were more optimistic regarding unemployment expectations, their saving opportunities over the next 12 months, and their financial situation over the next 12 months. The most striking improvement, however, concerned the expectations regarding the general economic situation, for which the balance increased by 4 and 5 points in the EU and the euro area respectively.
This dramatic increase in consumer confidence seems to have been heavily influenced by the presidential elections in France, where consumer confidence improved by 9 points between April and May. Among the other large Member States, Germany (+2), Italy (+1) and the UK (+4) also saw their consumer confidence rise, while consumers in Spain (-1) and Poland (-1) reported falling confidence.
Retail trade confidence indicator (s.a.)
EU: May 5
Euro area: May 2
In the EU, the retail confidence indicator declined slightly in May, while remaining at a very high level. At the same time retail confidence improved by two points in the euro area.
As for the components of the retail confidence indicator, the present business situation was assessed more positively in the euro area, while it was considered to have deteriorated slightly in the EU. In both areas, retailers expect the business situation to worsen in the next three months. These negative views are mitigated or outweighed by retailers' assessments of their volume of stocks, which became more optimistic, especially in the euro area.
The results for the large Member States are generally positive, with the exception of the UK, where retail confidence slumped by 9 points. In Spain (+3), France (+1) and Italy (+7), confidence among retailers improved, while it remained unchanged in Germany and Poland.
Construction confidence indicator (s.a.)
EU: May 1
Euro area: May 0
In May, the construction confidence indicator for the EU has remained stable for the fifth consecutive month. The indicator for the euro area has recorded only marginal changes during the spring, with the last observation in May signalling a slight decline
In both the EU and the euro area, managers' assessment of order books worsened, which was also the case for employment expectations in the euro area. In the EU, employment expectations were stable
Among the large Member States, construction managers became more confident in France (+2) and the UK (+1). On the other hand, confidence declined in Spain (-1) and Italy (-7), and remained unchanged in Germany and Poland.
Financial services confidence indicator (n.s.a.)
EU: May 31
Euro area: May 29
Although a positive trend was observed in 2006, the financial services confidence indicator was rather erratic during the first five months of 2007. In May, the confidence indicator decreased in both the EU and the euro area.
Virtually all the components contributed to the decline. The only exception is EU managers' assessment of the expected evolution of demand, which increased somewhat. Otherwise the decline in confidence can be attributed to the deterioration in managers' views of the current business situation and the recent evolution of demand.
These results stem from the new EU survey in the financial services sector, recently launched by the European Commission to further increase the sectoral coverage of its survey programme. Following the schedule of the other business surveys, the survey has been carried out on a monthly basis since April 2006. The objective is to achieve representative results for the EU and the euro area as a whole, rather than for individual Member States.
