EU economic sentiment improves modestly in May
By Josh White
Date: Tuesday 27 May 2025
(Sharecast News) - Economic sentiment in the European Union improved modestly in May, breaking a two-month streak of declines, according to fresh survey data from the European Commission's on Tuesday.
The economic sentiment indicator (ESI) rose by 0.6 points to 95.2 in the EU and by one point to 94.8 in the euro area.
Despite the uptick, both readings remained below the long-term average of 100, reflecting continued caution among businesses and consumers.
The improvement was driven primarily by a rebound in confidence in the retail trade sector and among consumers, with construction also contributing modestly.
Confidence in the services and industry sectors remained largely unchanged.
Among major economies, Italy and Germany posted the strongest gains, while France saw a sharp decline, and smaller drops were recorded in the Netherlands, Poland and Spain.
Consumer confidence rose by 1.4 points, bolstered by improving perceptions of the economic outlook and household finances.
Retail trade confidence also recovered, although retailers expressed more pessimism about future business conditions.
In construction, confidence increased due to stronger order book assessments, though hiring plans in the sector were largely unchanged.
The employment expectations indicator also edged up, rising 0.6 points to 97.5 in the EU, driven mainly by better hiring plans in retail.
However, job expectations remained broadly steady in other sectors, and consumer unemployment fears increased.
Price expectations declined across sectors but stayed above historical averages, while perceived inflation over the past year remained elevated.
Meanwhile, economic uncertainty fell in May after a sharp increase in April.
The decline was attributed to improved consumer sentiment about future finances and reduced uncertainty in the industrial and retail sectors.
Overall, while the data pointed to stabilising sentiment, it signalled only a partial recovery amid a still-fragile outlook.
Reporting by Josh White for Sharecast.com.
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