According to the report from European Commission, in May 2019, the Economic Sentiment Indicator (ESI) increased in the euro area (by 1.2 points to 105.1) and remained broadly stable in the EU (+0.2 points to 103.8).

The improvement of euro-area sentiment resulted from higher confidence in industry and, to a lesser extent, in services and among consumers, while confidence remained virtually flat in retail trade and cooled down significantly in construction.

Industry confidence booked the first solid improvement (+1.4) in thirteen months, thanks to the sharpest increase in managers’ production expectations in 6 ½ years, as well as more favourable assessments of the stocks of finished products. The current level of overall order books, on the other hand, was assessed more negatively.

Services confidence improved slightly (+0.4), reflecting somewhat better assessments of past and expected demand, while managers’ views on the past business situation remained virtually unchanged. Consumer confidence firmed (+0.8), propelled by households’ brighter expectations about the general economic situation, as well as more upbeat views on their past and future financial situation, which, however, failed to significantly alter their intentions to make major purchases. Retail trade confidence was broadly stable (-0.1), as improved appraisals of the present business situation were counterbalanced by lower assessments of the expected business situation and the adequacy of the volume of stocks. Construction confidence took the strongest hit in some three years (-2.4), as managers’ assessments of the level of order books and, particularly, their employment expectations clouded over. Finally, financial services confidence (not included in the ESI) increased (+2.9) on the back of more positive views on past demand and the past business situation, which were only partially outweighed by grimmer demand expectations.