Economic sentiment, employment expectations up in EU, euro area in May
The economic sentiment indicator (ESI) improved in both the European Union (EU) and the euro area by 0.6 points to 95.2 and by 1 point to 94.8 respectively in May this year after two months of decline, according to the European Commission.
After April's steep increase, the economic uncertainty indicator (EUI) receded in May by 1.9 points to 18.5. The decrease was largely driven by abating uncertainty of consumers regarding their future financial situation. Also managers in the industry and retail trade sectors revised their assessment of uncertainty about their future business situation downwards.
The employment expectations indicator (EEI) also picked up in both areas: by 0.6 points to 97.5 in the EU and by 0.5 point to 97 in the euro area. Despite the partial recovery of previous months' losses, both indicators remain below their long-term average of 100.
The economic sentiment indicator improved in both the EU and the euro area by 0.6 points to 95.2 and by 1 point to 94.8 respectively in May after two months of drop. After April's steep rise, the economic uncertainty indicator receded in May by 1.9 points to 18.5. The employment expectations indicator also picked up in both: by 0.6 points to 97.5 in the EU and by 0.5 point to 97 in the euro area.
The rise in the ESI for the EU was primarily driven by a partial rebound of confidence in the retail trade sector and among consumers, with a moderate contribution also from the construction sector.
Confidence in both the industry and services sectors remained broadly stable.
Among the largest EU economies, the ESI increased in Italy (plus 2.8) and in Germany (plus 1.5). By contrast, the ESI declined markedly in France (minus 3.5), and more marginally in the Netherlands (minus 0.8), Poland (minus 0.6) and Spain (minus 0.4).
Industry confidence remained broadly stable for the third consecutive month in May (plus 0.2). The stability was due to managers' unchanged assessments of the current level of order books and the stocks of finished products, while their production expectations improved slightly.
Among the questions not entering the confidence indicator, managers' assessments of past production and export order books improved significantly.
Consumer confidence recovered in the month (plus 1.4), driven by receding pessimism about the general economic situation. Also consumers' assessment of their households' expected financial situation and their intentions to make major purchases rebounded. Their perceptions of their past financial situation, however, remained largely unchanged.
Retail trade confidence too recovered in the month (plus 1.4), largely attributable to the recovery of retailers' assessment of the past business situation and more favourable assessments of the volume of stocks. However, this was tempered by a further decline in retailers' expectations of their business situation over the next three months.
Selling price expectations dropped in industry, services, retail trade and construction. Despite these decreases, selling price expectations remain above their long-term averages in all four sectors, albeit only slightly so in the industry and construction sectors.
Consumers' price expectations for the next twelve months more than reverted the sharp increase of the previous month, thereby also halting the upward trend observed since late 2024.
By contrast, consumers' perceived price developments over the past twelve months increased after three months of decreases or stability, keeping the indicator at a high level, an official release from the European Commission said.
Fibre2Fashion News Desk (DS)
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