EU and Eurozone business confidence indicators improved again in September. The Economic Sentiment Indicator (ESI) rose to 82.6 (+1.6 points) in the EU and to 82.8 (+2.0) in the Eurozone. These levels, however, are still well below the respective long-term averages and the September increases were the smallest since the upturn started in April. The Business Climate Indicator (BCI) for the Eurozone also improved in September.

Mixed development on country levels

Developments at the country level are rather mixed, indicating divergent trends. Among the largest Member States, France and the Netherlands recorded the most significant rises in sentiment (+4.7 and +4.6, respectively), while Germany posted only a moderate increase (+1.5), mirroring a deceleration in the sentiment indicator for manufacturing. At the other end of the spectrum, sentiment worsened in Spain (-1.2) and in Italy (-1.3), while economic sentiment in the UK and Poland remained broadly unchanged.

Indicator by sector

Regarding individual sectors, the indicator for industry increased in both the EU (+2.0) and the Eurozone (+1.0), on the back of improving assessment of the level of stocks. Nonetheless, the improvements in employment expectations – not included in the confidence indicator – that started in April 2009 leveled off in both areas.

As with the overall indicator, the improvement in confidence in services also decelerated: it stabilised in the EU and increased by 2 points in the Eurozone. Confidence in retail trade and construction continued to rise at a steady pace (+1 for both sectors in the EU and the Eurozone). Consumer confidence improved markedly (+3 in both areas), mainly driven by expectations, which were more optimistic on both the general economic situation and the unemployment outlook.

Confidence in financial services - -  not included in the ESI - - bounced back strongly, by 8 points in the EU and 13 points in the Eurozone, reflecting markedly improved assessment of the business situation.