Eurozone Economic Sentiment Weakens in September

The Eurozone Economic Sentiment Indicator fell to 97.9 in September 2026 from 98.4 in August, below market expectations of 99.0. It marked the first decline in sentiment since April, as consumers became more concerned about rising oil prices and stalled negotiations to end the six-month US-Iran war. Consumer confidence deteriorated to -16.5 from -15.5, while inflation expectations rose to 35.2 from 33.0. Sentiment was broadly unchanged among retailers (-6.4 vs -6.3) and constructors (-5.0 vs -5.0), while manufacturers’ confidence improved to -3.8 from -5.0 despite higher selling-price expectations (20.3 vs 16.9). Service-sector sentiment also strengthened to 6.1 from 5.6. Among the major economies, sentiment fell sharply in France (-1.7) and moderately in Italy (-0.8), while it rose in Spain (+3.4), Germany (+0.6) and the Netherlands (+0.5).

The Eurozone Economic Sentiment Indicator rose for a fourth consecutive month to 98.4 in August 2026, up from a revised 97.1 in July and above market expectations of 97.5. It was the highest reading since January, as businesses and consumers remained hopeful of a resolution to the six-month-long US-Iran war. Confidence improved across all sectors, with sentiment strengthening among manufacturers (-5.3 vs. -6.1), service providers (5.8 vs. 5.1), consumers (-15.5 vs. -15.9), retailers (-5.7 vs. -6.8) and constructors (-5.0 vs. -5.2). Inflation expectations were mixed: consumer expectations rose to 33.0 from 30.4, while manufacturers’ selling-price expectations eased to 16.4 from 17.8. Among the major economies, sentiment improved in France (+2.3), Germany (+1.3) and Italy (+0.8), was broadly stable in the Netherlands (-0.1), and declined in Spain (-2.2).

The Economic Sentiment Indicator for the Eurozone rose to 96.9 in July of 2026 from the upwardly revised 95.4 in the previous month, ahead of the median market consensus of 96. It was the highest reading since February, reflecting an improvement in sentiment from the momentary drop in energy prices and borrowing costs on the short-lived truce in the Middle East war. The confidence indicator for services providers improved to 4.7 from the upwardly revised 4.2. Meanwhile, industrial pessimism softened to -6.1 from 7.5. Among the Euro Area's largest economies, the ESI rose for Germany (97.2 vs 91.6), France (95.9 vs 93.5), Italy (99.6 vs 99.2), and Spain (104.3 vs 103.5).