Economic sentiment in the euro zone dipped in May, while it remained broadly unchanged in the wider European Union, according to a newly released indicator.
The Economic Sentiment Indicator was 105.4 in the EU, while it decreased by 0.6 points to 105.5 in the euro area, both above the long-term average of 100.
The overall decline in the euro area resulted from weakening confidence in all the business sectors, while sentiment improved among consumers.
In the EU, a worsening of sentiment in industry was offset by moderate gains in the other business sectors, while consumers' confidence improved markedly.
The Netherlands (-4.6 points), Italy (-2.7) and France (-1.9) reported decreases, while the UK (+2.6) and Poland (+0.6) improved.
Meanwhile, Germany (-0.1) remained broadly stable.
The ESI remains above its long-term average in Germany, France, the Netherlands and the UK.
Although confidence remains far above its long-term average in the sector, industry contributed negatively to overall sentiment.
Confidence in industry decreased by 1.7 points in both the EU and the euro area, on the back of a drop in firms' production expectations and a worsening assessment of the level of order books.
Managers were also more pessimistic about their export order books and past production, which declined substantially, while their appraisal of stocks continued to recover from historic lows.
Sentiment in services remained broadly unchanged in the EU (+0.3) and decreased in the euro area (-1.2).
The difference between the two regions reflects managers' diverging views on expected demand, with an improvement in the EU and deterioration in the euro area.
Sentiment in the retail sector improved in the EU (+0.8), on the back of a very positive assessment of present business situation in the UK, whereas it declined in the euro area (-0.7).
Sentiment in construction remained broadly unchanged in the euro area (-0.3), while it improved slightly in the EU (+0.4), with the indicator remaining at very low levels in both regions.
In the EU, employment expectations deteriorated in industry and improved in services, which can mainly be ascribed to the UK.
In the euro area, employment expectations weakened both in industry and in services. Managers' selling-price expectations declined in these two sectors, as well as consumers' price expectation.
Confidence among consumers increased in both the EU (+3.2) and the euro area (+1.8), reflecting more optimism about the future general economic situation and decreasing unemployment fears.
Consumers were also more confident about their households' expected financial situation, especially in the EU.
Confidence in financial services - not included in the ESI - decreased in both the EU (-1.9) and - more markedly - in the euro area (-3.6), mainly because of a weaker assessment of past and expected demand evolution.
