Eurozone economic confidence rises slightly in May

Eurozone economic confidence improved slightly in May but remained below its pre-Ukraine war level, survey results from the European Commission showed on Monday.

The economic sentiment index (ESI) rose slightly to 105.0 in May from 104.9 in the previous month. The score was forecast to remain unchanged at 104.9.

Amongst the largest EU economies, the ESI rose markedly in Spain and, to a lesser extent, in France and Italy. Meanwhile, it remained virtually unchanged in Germany.

At 14.0, the services sentiment index rose to a three-month high in May, from 13.6 in April. Nonetheless, the reading was below economists' forecast of 14.3.

The consumer confidence index came in at -21.1 in May, in line with the flash estimate, but up from -22.0 in April.

Meanwhile, the industrial sentiment index dropped to 6.3 in May from 7.7 in the prior month. The score was forecast to fall to 7.5.

Employment expectations

Confidence among retailers dropped slightly in May, with the index easing to -4.0 from -3.9 in April. By contrast, the Employment Expectations Indicator increased mildly by 0.3 points to 112.9 in May.

The European Commission's Economic Uncertainty Indicator declined for the second month in a row, by -2.7 points to 22.6 in May.

Uncertainty diminished among consumers and in all surveyed business sectors, with the exception of retail trade, where it stayed broadly unchanged.

The ESI score is consistent with economic activity stagnating in the second quarter, Andrew Kenningham, an economist at Capital Economics, said. The survey also suggests that inflationary pressures remain intense, said Kenningham.