Brussels, 28 October 2005 - Economic sentiment continued to improve in October both in the EU and in the euro area. At 1.7 points in the EU and 1.9 points in the euro area the improvement was stronger than in previous months, indicating that the economy has overcome the soft patch between autumn of last year and June of this year. In both areas, the upturn in October lifted the economic sentiment indicator (ESI) above the long-term average of 100.
Economic sentiment indicator (s.a.)
EU: Oct. 101.8
Euro area: Oct. 100.5
The monthly economic sentiment indicator reflects general economic activity of the EU. This indicator combines assessments and expectations stemming from business and consumer surveys. The surveys are conducted in different sectors of the economy: industry, services, construction and retail trade as well as consumers.
Economic sentiment was boosted by a rise in confidence across almost all sectors. Particularly strong increases were registered in the services sector and the retail sector, but managers in industry and consumers also showed growing confidence. Only the construction sector did not follow this general tendency, with the confidence indicator remaining unchanged.
Economic sentiment improved in a large majority of Member States, with only 6 out of 25 countries registering a decline. Among the larger Member States, Italy and Germany saw noteworthy improvements of the ESI of 3.8 and 2.0 points respectively. Economic sentiment also rose in Spain and Poland, although more moderately. Against this general trend economic sentiment in France and the UK declined, owing to a softening of consumer and retail trade confidence.