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Euro area developments
Euro-area sentiment firmed on the back of higher industry, retail trade and construction confidence. Sentiment in the services sector and among consumers, by contrast, remained virtually unchanged. The ESI rose in all of the largest euro-area economies, most so in the Netherlands (+1.9) and Italy (+1.8), followed by Spain (+0.6), Germany (+0.5) and France (+0.4).
Industry confidence (+1.6) continued the rally it had embarked upon last autumn, thanks to managers' higher production expectations and improved appraisals of the current level of overall order books. The assessments of the stocks of finished products, by contrast, remained flat. The positive trend was also reflected in the questions not included in the confidence indicator (assessments of past production and export order books), both of which improved markedly. Broadly flat developments in services confidence (+0.2) resulted from improved assessments of past demand being partially offset by lower demand expectations, as well as unchanged views on the past business situation. For the third month in a row, consumer confidence remained broadly unchanged (+0.3) on a historically high level. Brighter assessments of the future general economic situation and households' improved saving expectations contrasted with grimmer views on future unemployment and, to a lesser extent, households' future financial situation. Retail trade confidence (+1.4) firmed due to managers' more upbeat appraisals of the present business situation, the adequacy of the volume of stocks and, in particular, the expected business situation. Also construction confidence (+1.6) improved, fuelled by upward revisions in both managers' employment expectations and their assessment of the level of order books. Deviating from the other sectors, financial services confidence (not included in the ESI) slipped (-6.8) due to markedly worsened assessments of the past business situation and past demand, which were only weakly counteracted by somewhat improved demand expectations.
Employment plans remained broadly unchanged in industry, services and retail trade, while they were revised upwards in construction. Selling price expectations firmed across all surveyed sectors, in line with higher price expectations among consumers.
EU developments
Developments in EU sentiment were perfectly in line with those at euro-area level, the EU ESI registering the same increase (+1.1) and settling at the identical level (113.0 points). Of the largest non-euro area EU economies, Poland posted upbeat results (+2.1), while the UK ESI shed 0.4 points. The developments at sectoral level were broadly in line with the euro area, an exception being mildly deteriorating services and slightly improving consumer confidence. As in the euro area, EU managers reported either upward revisions (construction) or broadly unchanged appraisals (industry, retail trade) of their employment plans. The only deviation were strongly capped (instead of virtually unchanged) employment plans in the services sector. In respect of managers' and consumers' (selling) price expectations, the expected upward trend in the euro area was echoed at EU level.