The upward trend in the Economic Sentiment Indicator (ESI) continued in September in both the EU and the euro area. The ESI rose to 82.6 (+1.6 points) in the EU and to 82.8 (+2.0) in the euro area. These levels, however, are still well below the respective long-term averages and the September increases were the smallest since the upturn started in April.

Developments at the country level are rather mixed, indicating divergent trends. Among the largest Member States, France and the Netherlands recorded the most significant rises in sentiment (+4.7 and +4.6, respectively), while Germany posted only a moderate increase (+1.5), mirroring a deceleration in the sentiment indicator for manufacturing. At the other end of the spectrum, sentiment worsened in Spain ( ‑1.2) and in Italy (-1.3), while economic sentiment in the UK and Poland remained broadly unchanged.

Regarding individual sectors, the indicator for Industry increased in both the EU (+2.0) and the euro area (+1.0), on the back of improving assessment of the level of stocks. Nonetheless, the improvements in Employment expectations – not included in the confidence indicator – that started in April 2009 levelled off in both areas.

As with the overall indicator, the improvement in confidence in services also decelerated: it stabilised in the EU and increased by 2 points in the euro area. Confidence in retail trade and construction continued to rise at a steady pace (+1 for both sectors in the EU and the euro area). Consumer confidence improved markedly (+3 in both areas), mainly driven by expectations, which were more optimistic on both the general economic situation and the unemployment outlook.

Confidence in financial services – not included in the ESI – bounced back strongly, by 8 points in the EU and 13 points in the euro area, reflecting markedly improved assessment of the business situation.