Economic sentiment was little changed in October. At a slightly firmer than expected 93.3, the headline index was down just 0.1 point versus its marginally stronger revised September mark. Even so, this was still its sixth decline in as many months and its weakest print since November 2020. It was also 6.7 points below its long-run average.

At a sector level, performances were again mixed. Confidence worsened slightly in industry (minus 9.3 after minus 8.9), retail trade (minus 7.8 after minus 5.7) and in the household sector (minus 17.9 after minus 17.8). Against this, there were marginal improvements in services (4.5 after 4.1) and construction (minus 5.9 after minus 6.0).

Regionally, the national ESI rose in Germany (89.6 after 89.1) and Spain (100.3 after 99.1) but fell in France (93.5 after 96.4) and Italy (96.9 after 97.8).This left only Spain among the large four economies above the common 100 long-run average.

In terms of inflation developments, expected selling prices edged higher in services (15.5 after 15.3) and also firmed again in manufacturing (3.6 after 3.4). However, household inflation expectations (11.4 after 12.0) unwound some of September's gain. The trend in all three measures looks to be broadly flat.

Today's update suggests that after a probable weak third quarter, Eurozone GDP began the current period on an equally soft footing. However, with the Eurozone RPI at 6 and the RPI-P at 4, the region's economic activity in general is at least no softer than expected.

Economic sentiment in October is expected to fall to 93.0 from 93.3 in September which was down for a fifth straight month and at its lowest level since November 2020.

Released by the European Commission, the economic sentiment index (ESI) provides a broad measure of both business and consumer sentiment. Results are available for all participating countries and aggregated to the Eurozone and European Union level. The survey is very detailed and offers information on demand, output and inflation.

The survey offers key sentiment data across the European Union and the Eurozone region. Data are available for each country and are aggregated for both the Eurozone and EU. It is conducted by the European Commission rather than Eurostat, the compiler of most other EMU data. The index is a broad measure of both business and consumer sentiment in the EU members. Because of its coverage of all the EU countries it is highly regarded in the financial markets as a good indicator of the mood of consumers and industry in each country. It is also normally a good indicator of quarterly GDP.

Confidence indicators are calculated for industry, services, construction, retail trade and consumers. In turn, they are combined into an overall composite number, the economic sentiment indicator (ESI). The data are seasonally adjusted and defined as the difference (in percentage points of total answers) between positive and negative answers. The survey also covers other areas of the economy that are not explicitly included in the ESI. In particular, responses to questions about the inflation outlook are used by the ECB as one means of measuring inflationary expectations.