The latest October 2025 readings point to a cautious improvement in sentiment across the euro area, with both the economic sentiment indicator (96.8) and the employment expectations indicator (96.9) edging up. Although still below their long-term averages, the upticks suggest that confidence is slowly rebuilding after months of subdued activity. The broad-based rise across industry, retail, construction and households hints at a gradual stabilisation, even as services remain essentially unchanged.

Industry stands out, with brighter production expectations and stronger order books signalling that demand may finally be firming. Retailers are more optimistic about future business conditions, despite a weaker recent performance. Consumers are feeling slightly better about the general economic outlook and household finances, though their reduced willingness to make major purchases reflects ongoing caution.

Construction confidence also improved, supported by order books and hiring plans, but a growing labour shortage highlights capacity pressures. Meanwhile, rising selling price expectations in construction and services contrast with easing consumer price expectations, adding complexity to the inflation narrative.

Despite the positives, economic uncertainty has increased, as firms remain wary about the months ahead. Overall, October's survey data depict a tentative recovery, momentum is improving, but confidence remains fragile and uneven across sectors. This latest update takes the RPI to 48 and the RPI-P to 53, meaning that economic activities are well ahead of the expectations within the euro area.

Economic sentiment expected at 95.7 for October versus 95.5 in the previous report. Industry sentiment seen at minus 10.1 versus minus 10.3. Consumer sentiment seen slightly better at minus 14.2 versus minus 14.9.

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.