ESI slips, Nordic member states lead recovery
France’s Economic Sentiment Indicator declined two points to 98.4 dragged down by industrial confidence drop, while the Euro area’s other major economies performed inversely with the exception of Italy‘s ESI slipping -1.7 points. Germany’s ESI edged modestly to 97 from 96.1, but Spain’s recorded a stronger gain, up over one point to 90.1 from 89. In the UK, the index stayed nearly stable at 98.3 from 98.2. As a result, and in the Euro area, the ESI fell -0.1 point to 95.9 and rose in the EU 27 to 97.4 from 97.2 salvaged by Poland leaping over four points to 98.8 from 94.6. Out of the EU 27, Nordic member states’ ESI topped their long term average, an exception in the Union and for over a year : Finland’s ESI jumped nearly four points to 102.8 from 99.4 while Sweden’s rose to 108.2 from 106.6, its fourth consecutive increase. In Denmark, the index grew more modestly but reached 105.7 points from 105.2
With production expectations in France turning negative to -1 from the previous month 3, Industrial confidence dipped to -16 from -12. Major trade partners’ confidence observed a similar trend (in Germany, the index dipped three points to -12, in Italy one point to -9, Spain’s stagnated at -21) leading the Euro area’s index to slip one point to -13. The UK proved more buoyant, up two points to -16 but the EU 27 index stayed unchanged at -13.
Inversely to France however, production expectations in the Euro area performed unevenly: Germany’s increased six points to 13, Italy’s grew three points to 9, while Spain’s stayed unchanged at 1 and the UK’s fell two points to 6. The Euro area’s nevertheless rose two points to 7, as Finland’s index, up six points to 24, recorded its third consecutive increase while other member states averaged lesser gains. East European member states by contrast recorded overall negative trends, with the exception of the Czech Republic’s index jumping 13 points to 20 and Poland’s climbing to 14 from 10 leading the EU 27 production index to increase one point to 8.
Slower order books in France, down two points to -48 unlike December, sapped moral unlike the Euro area’s up two points to -42, pushed up by Germany’s similar performance to -41, Spain and Italy gained three points each respectively to -49 and -38. Finland’s index skyrocketed 14 points to -43 helping the Euro area‘s to climb two point to -42 as several member states stayed in the red. In the UK, the order books index decreased by two points to
- 41, and similarly in several non Euro area member states, while Latvia’s leaped 10 points to -43. In the EU 27, the index grew one point to -42.
However, with the stocks of finished products index in France decreasing thanks to the winter sales period effective throughout the month of January, production trend observed in recent months bettered, although modestly, up one point to 8. In the Euro area, the index, up three points to -4, pointed towards signs of recovery, with Spain’s index climbing four points to -16, and Italy’s rising three points to -37. Germany’s stayed unchanged at 2. In the EU 27, the UK’s index climbed two points to 8 while Sweden’s soared to 30 from 9.
Stronger export order books in the Euro area and the EU 27, each up three points, accounted for regained optimism as member states recorded on average similar increases, unlike France where the index stayed unchanged at -52. Best performers included Finland, up 11 points, followed by Denmark, up 10 points, Latvia up 8 points, and Slovakia up 7 points.
Employment expectations stayed consequently mild in France, up one point to -23 while the Euro area’s increased two points to -18 pushed by accrued confidence, which may proved temporary: in Germany, Italy, and Spain, the index rose four points. Other optimistic member states included Slovakia, Hungary and Lithuania. In the UK, the index climbed one point to -9.
Nevertheless, fierce competition remained on most member states agenda with the Euro area’s selling price expectations index dipping two points to -4 and equally in the EU 27 to -2 reflecting member states determination to regain market shares. France’s index fell two points to -5, slightly higher than its major trade partners’ three points price cut on average. In the UK, the index climbed three points as the reduced VAT period, initiated to boost consumption, ended
