Macro · Macro Rapid Response Eurozone ESI: resilient economy, limited risks on prices

Key arguments

• ESI declined for the first time after four months of recovery, with consumer confidence the main drag due to sensitivity to fuel prices.
• Manufacturing sentiment reached a three-year high, while services improved on current conditions though expectations fell slightly.
• Selling-price expectations rose in manufacturing and construction but fell in services and retail; they remain below peak-conflict levels and do not signal worrying second-round effects.
• Survey modelling is consistent with core inflation rising toward 2.5% but limited overheating risks, so an October ECB hike is not warranted while December remains likely.

Corresponding source evidence

1. In September, the EU Commission’s ESI index fell to 97.9 from 98.4 , marking the first decline after four months of recovery.
2. This deterioration is attributed to the decline , already indicated by the preliminary estimate, in consumer confidence (-16.5 from -15.5), which is particularly sensitive to rising energy prices.
3. Businesses , however, remain resilient: climate improved in industry (-3.8 from -5.0) and in services (6.1 from 5.6), whilst it remained largely unchanged in retail trade and construction .