The European Commission’s Economic Sentiment Indicator (ESI) is a composite index comprised of five differently-weighted sectoral confidence indicators. It is heavily weighted towards confidence surveys from the business sector; the consumer confidence sub-index only accounts for 20% of the ESI. However, it has a good relationship with euro-area GDP, although not as a leading indicator.
The ESI recorded a reading of 103.5 in February, above the market’s expected figure of 101.5 and up from January’s reading of 102.6. The average reading since 1985 has been 101.
Overall sentiment in the euro-zone improved as three of the five confidence sub-indices showed gains. The Industry, Services and Consumer sub-indices increased while the Retail and Construction sub-indices deteriorated. On a geographical basis, the ESI rose in France, Germany and Spain but remained unchanged in Italy.