Economic sentiment indicator largely unchanged in EU, euro area in Jun

The employment expectations indicator (EEI) declined for the third consecutive month in both, approaching (minus 0.8 points in the EU to 100.4) or undercutting (minus 1.6 points in the euro area to 99.7) its long-term average.

While the ESI has remained essentially flat over the first six months of the year, around 4 points below its long-term average, the slow but continuous decline in the EEI has narrowed the gap between the two indicators, a European Commission release said.

In the EU, the sideward trend of the ESI reflected broadly stable confidence in industry, construction and among consumers, while confidence in services and retail trade dipped somewhat.

For the largest EU economies, the ESI improved markedly for Spain (plus 1.1) and more moderately for the Netherlands (plus 0.5), while it deteriorated for France (minus 0.7) and Italy (minus 0.7). The ESI remained broadly stable for Germany (minus 0.2) and Poland (minus 0.1).

Industry confidence remained broadly stable in June (minus 0.1) as managers' production expectations and their assessment of the current level of overall order books were largely unchanged.

However, slightly more managers assessed the stocks of finished products as too large/above normal, indicating weaker demand.

Consumer confidence brightened only marginally (plus 0.3), reflecting consumers’ improving views on their household’s past financial situation and intentions to make major purchases.

Consumers’ expectations about the general economic situation in their country and about their household’s financial situation remained broadly unchanged.

Retail trade confidence (minus 0.5) deteriorated slightly for the third month in a row in June. A marked drop in retailers’ assessment of the past business situation and a more moderate decrease in their business expectations for the next three months were partly offset by a lower assessment of the volume of stocks, signalling higher demand.

The employment expectations indicator (minus 0.8) accelerated its gradual decline towards its long-term average. The decrease reflects markedly lower employment plans in retail trade and construction and, to a lesser extent, in services, partly counterbalanced by more optimistic plans in the industry sector.

Consumers’ unemployment expectations, which are not included in the headline indicator, worsened slightly further.

Selling price expectations picked up in retail trade. Selling price expectations remained broadly stable and slightly below their long-term average only in industry.

Consumers’ price expectations for the next twelve months picked up again in June, while consumers’ perceived price developments over the past twelve months continued to decline, albeit remaining at a high level.

The Commission’s economic uncertainty indicator declined for the fifth month in a row (minus 0.5 to 17.3) in June. Consumers’ uncertainty about their future financial situation dropped.

Managers’ uncertainty about their future business situation decreased in retail trade.

Fibre2Fashion News Desk (DS)