Developments in the confidence indicators of the various sectors were in general rather subdued. The EU registered increasing confidence in the industry sector and among consumers, while confidence in the services sector diminished. Confidence in the retail trade and the construction sectors remained unchanged. In the euro area, the increase in consumer confidence outweighed the decline in the retail trade and the construction sectors, while in the other sectors (industry and services) confidence remained stable. All sectoral confidence indicators in both the EU and the euro area remain above their historical averages.
At the individual country level, the picture is mixed, but more than half of all countries showed an overall improvement in confidence. Among the large Member States, confidence improved in France (+0.8), Italy (+3.7), Poland (+5.0) and the UK (+5.3), while it decreased in Germany (-1.2) and Spain (-1.1).
Industrial confidence indicator
In February, the industrial confidence indicator increased in the EU, while it remained unchanged in the euro area. In both areas, the indicator remains at a very high level.
Managers' production expectations stayed constant in the EU, while they worsened in the euro area, although from a high level. The euro area decline in production expectations was offset by managers’ assessment of order books and stocks of finished products, which improved. A similar improvement was also recorded for the EU as a whole.
Most of the large Member States saw their respective industrial confidence indicator improve. Managers in France (+2), Italy (+2), Poland (+1) and the UK (+11) became more optimistic, whereas in Germany (-1) and in Spain (-2) they became less confident.
Service confidence indicator
Since April 2006, the services confidence indicator in both the EU and the euro area has remained relatively stable above its long-term average. In February the indicator decreased marginally in the EU, while it was unchanged in the euro area.
The components of the confidence indicator showed diverse developments. In the EU managers turned more negative regarding the recent and expected evolution of demand, while their assessment of the current business situation remained stable. In the euro area the improvement in managers' assessment of past and expected evolution of demand was balanced by a perceived decline in the current business situation.
The services confidence indicator declined or was unchanged in almost all the large Member States. The indicator decreased in Germany (-4), Spain (-2), France (-2) and the UK (-3), and after a surge in the previous month, confidence in Poland remained unchanged. The only exception was Italy, where confidence rose by a remarkable 8 points.
Consumer confidence indicator
In February, consumer confidence improved in both the EU and the euro area. In both areas, the indicators remained on an upward trend and stand well above their long-term averages.
Except for euro-area households' assessment of their financial situation over the next 12 months, which is expected to decline marginally, all underlying components improved in both areas. Consumers expected both the general economic situation as well as their opportunity to save over the next 12 months to improve. Unemployment expectations became significantly better, while households in the EU as a whole also expect their financial situation to improve over the next 12 months.
Even though the results are mixed at the country level, a clear majority of all countries showed an improvement in consumer confidence. Confidence in all the large Member States increased, notably in Germany (+3), France (+3) and Poland (+6), but also in Spain (+2), Italy (+1) and in the UK (+1).
Retail trade confidence indicator
In the EU, the retail confidence indicator was unchanged in February for the third consecutive month. In the euro area retail confidence is returning to its long-term average. While it still remains above the long-term average, the gap between the peak reached in October 2006 and the average has more than halved.
The developments in the components of the retail confidence indicator were more or less the same in both areas. Retailers' assessment of the current business situation became slightly less optimistic, while their appraisal of the volume of stocks remained unchanged. In the EU, these developments were balanced by improvements in the expected business situation, but in the euro area, the strengthening of expectations was not enough to cancel out the negative effect of the current business situation.
The picture among the large Member States is quite diverse. Confidence among retailers improved in Spain (+2), France (+3), Poland (+2) and in the UK (+3), but worsened in Germany (-5) and Italy (-1).
Construction confidence indicator
For the EU, the construction confidence indicator did not change in February from the previous month. The euro area recorded its third consecutive decline. Both indicators still remain at very high levels, well above their long-term averages.
In both the EU and the euro area, managers' assessment of order books worsened slightly. The difference between the developments in the overall indicators of the two economic areas stem from the diverging views regarding employment expectations; while employment is expected to decline in the euro area, it is expected to hold up in the EU.
Among the large countries, construction managers became more confident in Spain (+1), France (+1) and the UK (+3), while confidence remained unchanged in Italy and Poland. In Germany (-6) construction confidence saw a sharp decline.
