The economic sentiment indicator in the Euro Area edged lower to 93.3 in October 2023, a slight decrease from the revised 93.4 in the previous month and compared to the market’s expected 93.0. This marked the lowest reading since November 2020, as persistent inflationary pressures within the bloc and the European Central Bank’s unprecedented policy tightening continued to exert a dampening effect on overall sentiment. Morale declined among manufacturers (-9.3 vs -8.9 in September), consumers (-17.9 vs -17.8), and retailers (-7.8 vs -5.7). This decrease was partially offset by an improvement in confidence among service providers (4.5 vs 4.1) and constructors (-5.9 vs -6.0). Among the bloc’s largest economies, the ESI deteriorated significantly in France (-2.9) and, to a lesser extent, in Italy (-0.9). In contrast, sentiment improved in Spain (+1.2) and Germany (+0.5), while it remained unchanged in the Netherlands.
