Services Sentiment

The Services confidence indicator is a monthly survey of EU services managers' confidence. It is published by the European Commission's Directorate-General for Economic and Financial Affairs (DG ECFIN). It belongs to the Joint Harmonised EU Programme of Business and Consumer Surveys (BCS programme). A Commission decision of November 15, 1961 started the programme, extended to services in 1996.

It covers 37 NACE Rev. 2 divisions in sections H to N and R to S. Public services stay outside it, while retail trade has its own survey.

The nominal monthly sample is about 47,000 services units with about 32,000 effective EU replies. It is not the Economic Sentiment Indicator, consumer sentiment or a purchasing-managers index (PMI). It is not financial-services confidence either: the Commission ran a separate financial-services survey from April 2007 to March 2023.

Fieldwork usually covers the first two to three weeks of each month. Business-survey results reach DG ECFIN at least 5 working days before the reference month ends. Detailed results are published two working days before each month-end in a press release, while December results appear in early January.

Standardisation uses a frozen sample to avoid monthly revisions; country weights update each January. Seasonal coefficients are updated each January, allowing small revisions and country-level corrections when needed.

Each release brings the Economic Sentiment Indicator, the Employment Expectations Indicator, sectoral confidence and uncertainty indicators. A Flash consumer-confidence release follows around the 20th of each month.

Three equally weighted balances drive the headline, covering past performance and expectations.

• Business situation development over the past 3 months (1/3): managers rate how their own business fared over the past 3 months.
• Demand evolution over the past 3 months (1/3): managers report how demand (turnover) for their services changed over the past 3 months.
• Expected demand over the next 3 months (1/3): managers say how demand, or turnover, for their services should change over the next 3 months.

Employment and price expectations appear alongside the indicator but are not components.

In the April 29, 2020 release, EU services confidence stood at -35.4 after -1.8 in March 2020, the lowest level on record since 2000. All three components hit simultaneous minima: business situation -31.0, past demand -26.2 and expected demand -49.0, so expectations led the fall. The same release put the EU sentiment index at 65.8 and employment expectations at 63.3, its lowest on record. Replies ran about 20% below normal, while Italy sent no data so its values were imputed. French declines were likely underestimated, and services capacity utilisation stood at 86.1%.

1. Reply shares: count positive and negative shares in each stratum by simple or size-weighted counting, for example by turnover or employment. Then combine strata as weighted averages using official weights such as sector value added.
2. Balance: take the balance in percentage points, with B = P minus M for three-option questions. P is the positive share and M the negative share; six-option questions use B = (PP + 1/2P) minus (1/2M + MM).
3. EU aggregates: average national results with country weights, where each weight is the country's share in an EU reference series. Eurostat supplies the reference series, supplemented by AMECO forecasts and smoothed as a three-year centred moving average, usually updated each January.
4. Seasonal adjustment: adjust balances with Tramo-Seats and automatic outlier detection in JDemetra+. In use since May 1, 2022, it replaces Dainties, with coefficients updated each January.
5. Headline average: the indicator is the simple arithmetic mean of the three balances: SCI = (B_SERV001 + B_SERV002 + B_SERV003) / 3. With the published figures this gives (-31.0 + (-26.2) + (-49.0)) / 3 = -106.2 / 3 = -35.4.