Economic Sentiment

The Economic Sentiment Indicator (ESI) is a DG ECFIN composite of business and household sentiment across the EU. It blends 5 confidence indicators: industry, services, consumers, retail trade and construction. Each confidence indicator averages survey balances, which are positive minus negative answer shares. The panel covers about 134000 firms and 32000 consumers, with national institutes doing fieldwork and DG ECFIN aggregating results. The headline combines 15 standardised components rather than the 5 published averages. Its purpose is to track GDP growth, not to measure output itself. The scale centres on 100, so above 100 means above-average sentiment. Financial services confidence stays outside the index and appears separately. Employment expectations also stay outside and form a separate jobs gauge.

Fieldwork runs in the first 2 to 3 weeks of each cycle. Business results reach the compiler at least 5 working days before the end of the cycle. Consumer results arrive about 7 working days before the end of the cycle. Full results appear 2 working days before the end of the cycle. The cycle-end release shifts to the start of the next cycle. An early flash consumer reading arrives ahead of the full release. Each release adds sector data plus employment expectations, uncertainty and labour hoarding gauges with detailed tables. Past values can change on seasonal adjustment or revised national data. Country weights update on a set cycle.

The index uses fixed sector weights of 40/30/20/5/5 across 5 sectors and 15 components. Weights reflect sector breadth and tracking of output growth, and favour clarity over exact economic structure.

• Industry, 40%: manufacturing demand and output outlook from order books, stocks with inverted sign and production expectations over the next 3 months.
• Services, 30%: activity and demand from past business shape, past demand and expected demand over the next 3 months.
• Consumers, 20%: household funds over the past 12 months and next 12 months, national economic outlook and major purchase aims.
• Retail trade, 5%: sales over the past 3 months, stocks with inverted sign and expected sales.
• Construction, 5%: order books and hiring plans.

In a sharp past crash the EU index fell 28.8 to 65.8 and the euro area index fell 27.2 to 67.0. It was the sharpest single-period fall on record, leaving both close to severe downturn lows. Services confidence fell 32.7 to a record low, while industry fell 19.2 but stayed above its earlier low. One large country supplied no data so large-economy averages stood in. One country likely understated falls with online-only collection. The release warned data were less comparable while revising the earlier reading down. The euro area moved down 0.3 to 94.2 and the EU moved down 0.2 to 94.6.

1. Balances: each question becomes a balance from -100 to +100, then seasonally adjusted with Tramo-Seats. Stocks enter with inverted sign.
2. Country weights: national balances combine by country shares in sector value added or private spending, smoothed and refreshed on a set cycle. Reference series come from Eurostat.
3. Standardisation: each of the 15 components is centred and scaled against a fixed historical sample, so lively series do not dominate calm ones.
4. Weighted average: the 15 scaled components combine by 40/30/20/5/5, split evenly within each sector. The index is computed only when available parts cover at least 30% of weights.
5. Rescale: the average is rescaled to a mean of 100 with a standard deviation of 10. Above 100 means above-average sentiment and most readings sit between 90 and 110.