According to the report from European Commission, in December 2020, the Economic Sentiment Indicator (ESI) picked up in both the euro area (+2.7 points up to 90.4) and the EU (+2.8 points up to 89.5 points), almost offsetting the drop registered in November. Economists had expected an increase to 90.0 in the euro area. Also the Employment Expectations Indicator (EEI) partially recovered from last month’s drop (+1.4 points to 88.3 in the euro area and +2.1 points to 89.5 in the EU).

In the euro area, the ESI’s recovery was driven by markedly higher confidence in industry and among consumers and, to a lesser degree, in construction. By contrast, confidence registered mild declines in services and retail trade. Amongst the largest euro-area economies, the ESI increased significantly in Italy (+6.8), Spain (+3.3) and, to a lesser extent, in the Netherlands (+2.5) and France (+2.1), while it remained broadly unchanged in Germany (+0.1).