Euro Area Services Sentiment Improves to 13-Month High

The index measuring services confidence in the Euro Area rose by 1.4 points from the previous month to 7.2 in January of 2026, reflecting the strongest confidence in two years, and ahead of market expectations of a softer increase to 6. Services providers displayed a rebound in the assessment of business over the past three months (1 vs -0.2 in December 2025) and the evolution of demand (9.2 vs 6.2) over the past three months, prompting a slight improvement in expectations of demand 11.4 vs 11.3) and employment (1 vs -0.2) in the upcoming three months. In the meantime, selling price expectations eased (14.1 vs 14.5) for the first time since September.

The index measuring services confidence in the Euro Area inched down by 0.2 percentage points to 5.6 in December of 2025, slightly under market expectations that it would rise to a 14-month high of 5.9. Still, the result reflected a magnitude of confidence in the sector that was firmly above the average from the previous year. The assessment of the business situation over the last three months softened but remained positive (0.1 vs 0.9 in November), aligned with a less-optimistic outlook for demand in the upcoming quarter (5.2 vs 5.8).

Services confidence in the Euro Area rose by 1.5 points to 5.7 in November 2025, the highest since October 2024. Considering the broader European Union, the index increased by 1.4 points, thanks to a broad-based improvement in the assessment of all three components: past demand, past business situation and expected demand.