The Economic Sentiment Indicator (ESI), which measures the confidence of entrepreneurs and consumers, continued to improve in the European Union in August, albeit at a slower pace than in July. It rose by 0.6 points, to 102.7 points, according to the results of the survey on economic conditions, published on 30 August by the European Commission. Progress was also noted in the eurozone, where the index rose by 0.7 points, to 101.8 points. The previous comparable level dates back to March 2008.

Among the largest economies, the UK registered the most significant gain (+1.5), followed by Germany (+1.1). Improvements were less pronounced in Spain (+0.9) and in France (+0.4). In contrast, sentiment deteriorated in Italy (-0.9), Poland (-0.9) and even more so in the Netherlands (-2.1).

Sentiment in industry improved (by one point) in the EU and remained broadly unchanged in the eurozone. The majority of respondents in this sector reported sizeable improvements in their order books. However, managers were cautious regarding their production expectations.

Confidence among consumers improved markedly, rising by three points in both the EU and the eurozone. Widely-felt optimism about the general economic situation as well as further considerable easing of unemployment fears set the tone.

The confidence indicator in services decreased by one point in the EU and improved by one point in the eurozone. Managers’ pessimistic assessment of the past business situation in the UK explains the difference in trends between the two areas.

After a sharp drop in July, confidence in financial services registered a significant increase in the EU (+7) due to a substantially brighter future demand outlook. In the eurozone, the confidence indicator remained broadly unchanged, after having improved in July.