Commentary Directory

EU Economic Sentiment: September 2023

Jacob Hess
September 28, 2023

EU Economic Sentiment

9/28/2023 (September 2023)

92.8 (-0.4 pts)


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Consumer Confidence -18.7 (-1.6 pts)
Employment Expectations Indicator 102.4 (+0.6 pts)

In September 2023, the Economic Sentiment Indicator (ESI) for the EU slightly increased, dropping by -0.4 points to 92.8. On the other hand, the Employment Expectations Indicator (EEI) showed a positive trend, rising in both the EU and the euro area. The decline in the ESI was largely attributed to a significant drop in consumer confidence, especially in Spain and Italy, while France saw an improvement. Industry confidence remained stable, but consumer confidence saw a notable decline, down -1.6 pts to -18.7, due to increased pessimism about financial futures and the broader economic situation. There was also an increase in consumers’ selling expectations over the next 12 months, bring that index to the highest since April. The EU Economic Uncertainty Indicator rose in September, up 1.6 pts to 21.1, indicating heightened uncertainty among managers in various sectors and consumers regarding their future financial situations.


It is fully expected for economic sentiment to continue to decline in the EU through the rest of 2023, and the downtrend should be gradual like the the September move. The ESI is now back toward the October 2022 near-term low of 92.9 and with good reason. High interest rates are making their impact across both consumers and businesses. With a slight increase in selling price expectations, likely caused by energy prices, the ECB will make sure the full force of the impact of rates is felt.