In May 2025, the economic sentiment indicator (ESI) rebounded slightly from a revised 93.8 points the previous month to 94.8, 0.8 points above the consensus forecast, ending a two-month slump. The employment expectations indicator (EEI) rose by 0.5 points to 97.0. Though still below the neutral benchmark of 100, these improvements signal the beginning of a stabilisation phase.

Consumer confidence saw a notable recovery (by 1.4 points to minus 15.2 points), primarily due to reduced pessimism about the general economic outlook and improved expectations regarding household finances and major purchases. This was complemented by an uptick in retail trade confidence (from minus 8.9 to minus 7.0), driven by better past business performance, although future expectations remained cautious.

National trends were mixed: Italy (98.6 after 95.8) and Germany (91.5 after 90.0) showed encouraging gains, while France (93.1 after 96.6) and Spain (103.4 after 103.8) experienced declines; however, Spain remained above the 100 benchmark. Sector-wise, confidence in industry and services remained stable, while construction saw a modest improvement, with fewer firms reporting insufficient demand.

Encouragingly, inflationary pressures appear to be cooling, with selling price expectations falling across all sectors. Meanwhile, economic uncertainty eased, especially among consumers and retail managers. Overall, May offered tentative signs of resilience, but the road to full recovery remains uneven and fragile. This latest update takes the RPI and RPI-P to 3, meaning that economic activities are within the consensus of the euro area economy.

Economic sentiment expected at 94.0 for May versus 93.6 in the previous report. Industry sentiment seen at minus 10.6 versus minus 11.2. Consumer sentiment seen at minus 15.2.

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.