In August 2025, the economic sentiment indicator declined to 95.2, 0.8 points below the consensus forecast and remaining below its long-term average, while employment expectations increased to 97.8. Across key Euro Area economies, sentiment rose in France (92.0 after 91.9) but fell in Germany (90.9 after 91.9), Italy (98.4 after 99.4) and Spain (101.7 after 104.3), suggesting that regional resilience is declining.

Industry confidence weakened slightly as production expectations declined, though steadier order books and past production gains softened the impact. Services confidence also dipped, driven by weaker assessments of past demand, but outlooks for future demand brightened. Consumers were marginally more pessimistic about household finances, though intentions to make significant purchases improved. Retail trade confidence edged higher, supported by better business assessments, while construction confidence dipped as order books weakened, though labour shortages continued to rise.

Employment prospects improved modestly across industry, retail and construction, but remained flat in services, with labour hoarding falling below average levels. Inflation dynamics were uneven. Selling price expectations fell in industry, retail and construction, but rose again in services, while households expected future price increases despite easing perceptions of past inflation.

Economic uncertainty eased overall, with services and industry managers reporting less concern about the outlook, though construction firms and consumers became slightly more cautious. Overall, sentiment reflects subdued confidence but a cautious resilience in employment and demand outlooks. This latest update takes the RPI to minus 27 and the RPI-P to minus 31, meaning that economic activities are well behind schedule for the euro area economy.

Economic sentiment expected at 96.0 for August versus 95.8 in July.

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.