Trade & Sector NewsEuropean Business Cycle Indicators 3rd Quarter 2023

The recent deterioration in consumer confidence in August and September - if confirmed in the months ahead - could further dampen the prospects for household spending.

Key facts:
  • After a marked decrease over the second quarter, the EU and euro-area Economic Sentiment Indicators (ESI) slipped further, finishing the third quarter of this year 1.3 (EU) / 2.0 (EA) points lower compared to June. The indicator dipped further below its long-term average of 100 in both the EU (92.8 points) and the euro area (93.3 points).
  • The EU/EA Employment Expectations Indicator (EEI) weakened in July and August before picking up slightly in September. The indicator’s level in September was 1.9 (EU) / 2.2 (EA) points lower than in June, while remaining above long-term average.
  • Confidence worsened over the third quarter in construction and among consumers. Industry and services confidence weakened to a lesser extent thanks to some signs of stabilisation in September. Confidence remained broadly stable in retail trade.
  • Economic sentiment worsened further in two of the six largest EU economies, namely in Germany (-4.2) and Italy (-3.1). Sentiment in France (-0.8), Spain (-0.5) and the Netherlands (-0.5) was broadly stable, while improving again in Poland (+2.1). Compared to the indicators’ long-term averages, confidence is now below average in all six largest Member States.
  • The EU/EA Economic Uncertainty Indicator (EUI) picked up slightly, driven by higher perceived uncertainty in services. In industry, retail trade and among consumers the indicator remained broadly stable at June levels, while uncertainty decreased in construction.
  • In July, capacity utilisation in industry decreased by 1.0 point compared to April and is now slightly below its long-term average. Capacity utilisation in services increased fractionally, rising above its long-term average.
  • In July, the shares of industry managers pointing to shortages of material and/or equipment and/or to shortages of labour force as factors limiting their production declined, but remained high by historical standards. The share of managers reporting insufficient demand increased further, to above its long-term average level.
  • Quantitative price expectations for the next 12 months decreased slightly further. However, consumers’ qualitative price expectations, which are published on a monthly basis, picked up in August and September.


Source: European Commission

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