According to the report from European Commission, in March 2019, the Economic Sentiment Indicator (ESI) decreased slightly in both the euro area (by 0.7 points to 105.5) and the EU (by 0.4 points to 105.0).1

The deterioration of euro-area sentiment resulted from markedly lower confidence in industry and, to a lesser extent, services, while confidence improved in retail trade and construction and remained broadly stable among consumers.

The marked decrease in industry confidence (−1.3) resulted from managers' more pessimistic views on all three components, i.e. production expectations, the current level of overall order books and the stocks of finished products. The decline in services confidence (−0.8) was driven by managers' significantly more pessimistic views on past and expected demand, while their assessment of the past business situation held up. The stability of consumer confidence (+0.2) resulted from households’ more positive assessments of their past financial situation and their expectations about the general economic situation, partly offset by a slight decrease in their intentions to make major purchases.

Consumers’ expectations of their future financial situation remained broadly stable. The strong increase in retail trade confidence (+1.5) resulted from more positive views on all its components: the present and expected business situation, and managers’ assessment of the adequacy of the volume of stocks. Increasing construction confidence (+0.9) was fuelled by managers' more optimistic views on the level of order books, while their employment expectations worsened. Finally, financial services confidence (not included in the ESI) increased sharply (+9.2), reflecting strong improvement in all its components (i.e. managers' appraisals of past and future demand and their assessment of the past business situation).