Following June's sharp increases which had lifted the indicators to their highest levels in some ten years, the euro area Economic Sentiment Indicator (ESI) moved broadly sideways (+0.1 points to 111.2) in July, while its EU counterpart continued increasing (+0.8 points to 112.1).
Euro area developments
Broadly unchanged euro-area sentiment resulted from higher confidence in the construction and services sectors, which was outweighed by mildly weakening levels of retail trade and consumer confidence. Sentiment in industry remained flat. Amongst the largest euro-area economies, the ESI rose only in Germany (+0.6) and, to a lesser extent, the Netherlands (+0.3), while it weakened in Italy (-0.6), France (-0.7) and Spain (-1.0).
EU developments
The slight increase of the ESI in the EU (+0.8) was mainly due to improved sentiment in the largest non-euro area EU economy, the UK (+3.9), while sentiment in Poland eased somewhat (-0.5). From a sectoral perspective, changes in industry (mildly up), services (up) and consumer confidence (marginally down) were broadly in line with euro area developments, the same holding true for the financial services sector (down). Only the assessments of retail trade (up) and construction managers (mildly down) differed from those of their euro area counterparts. Going in lockstep with the euro area, EU managers' employment expectations saw upward revisions in all surveyed sectors, an exception being construction, where they remained broadly stable. By contrast, due to deviating trends in the UK, managers' price expectations at EU level only firmed in a single sector (construction), while they eased in all remaining ones (industry, services, retail trade). Finally, lower price expectations among euro area consumers were matched by corresponding developments at EU level.
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