According to the report from European Commission, in October 2020, the recovery of the Economic Sentiment Indicator (ESI), which had started in May, came to a halt in both the euro area (unchanged at 90.9 points) and the EU (unchanged 90.0 points). The Employment Expectations Indicator (EEI) turned negative (down by 1.8 points to 89.8 in the euro area and by 1.2 points to 90.4 in the EU). 

In the euro area, the ESI’s stagnation reflected weaker confidence in services and, more so, among consumers, which was counterbalanced by a continued recovery of industry, retail trade and construction confidence.

Industry confidence booked the sixth consecutive increase (+1.8), thanks to (another) marked improvement of managers’ appraisals of the current level of overall order books and slightly more benign views on the adequacy of the stocks of finished products. Services confidence (-0.6) halted the recovery it had embarked upon in June, as the deterioration of managers’ demand expectations since August intensified and the ongoing rebound in the appraisals of the past business situation and past demand lost steam. Consumer confidence (-1.6) slipped, as households reported growing concerns about the expected general economic situation and their expected financial situation, which were matched by more cautious intentions to make major purchases. Retail trade confidence continued its recovery (+1.7), thanks to brightening assessments of the past business situation and the adequacy of the volume of stocks, which were however partly offset by the third consecutive deterioration in the expected business situation. Construction confidence firmed (+1.1) thanks to improving employment expectations and slightly better assessments of the level of order books. Finally, financial services confidence (not included in the ESI) posted the first decline (-3.4) since the onset of its recovery in May.