ESI average improves in EU and Euro area but drops in Cyprus

The Economic Sentiment Indicator (ESI) has improved further in both the EU and the Euro area in October 2010, however in Cyprus, after five months of continuous improvement, it has dropped.

According to a report published by the EU Directorate General for Economic and Financial Affairs, the indicator increased by 0.5 of a point in the EU and, more significantly, by 0.9 of a point in the Euro area, reaching 104.1 in both areas.

In both the EU and the Euro area the ESI is now above its long-term average. The majority of member states reported improvements in sentiment.

Among the seven largest member states, France registered the most significant increase (+3.4), followed by the Netherlands (+2.8). Improvements were less pronounced in Poland (+0.5), Germany (+0.3), Italy (+0.3) and in the UK (+0.3). In contrast, sentiment worsened slightly in Spain (-0.2). France, Germany, the Netherlands and the UK are all above their long-term average.

In Cyprus, the indicator dropped from 93.1 points in September to 88.4 points in October. The Services Indicator worsened from +5 points in September to around -1 point in October, and the Industry Indicator went to -7 points in October from -4 points in September.

The Retail Indicator improved from -15 points in September to -12 points in October, while the Construction Indicator went from -47 points in September to -49 points in October.

Regarding consumers, the Consumer Confidence Indicator remained unchanged at -32 points, while the Business Climate Indicator for Employment improved to -11 points in October from -13 points in September.