In March 2025, the euro area economies exhibited a cautious mood, as both the Economic Sentiment Indicator (ESI) and Employment Expectations Indicator (EEI) dipped further below their long-term averages. The ESI fell by 1.1 points in the eurozone, dragged down by weakening confidence in services, retail trade, and among consumers. Meanwhile, the EEI slipped by 0.7 points in the euro area, reflecting more pessimistic hiring outlooks, particularly in retail.

Country-level shifts were mixed: France and Italy experienced sharp declines in sentiment, while Spain and Germany reported slight improvements. Industry sentiment remained stable, with firms holding steady expectations on orders and production. Services, however, saw a notable setback after a period of stability, with all three sentiment components deteriorating. Retail trade also weakened, driven by gloomier business expectations and rising stock levels.

Although construction confidence remained steady, concerns about labour shortages increased. Consumers expressed deeper concerns about their economic outlook, despite a slight uptick in intentions for significant purchases. Interestingly, while consumer price expectations continued climbing, uncertainty indicators showed some reliefparticularly in industry and constructionsuggesting hope for future stabilisation despite current economic unease. The latest update takes the RPI to minus 30 and the RPI-P to minus 31. This means that economic activities are well behind market expectations of the euro area economy.

Economic sentiment expected up slightly to 96.9 in March from 96.3 in February.

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.