Euro Area Services Sentiment Continues to Improve

The index measuring confidence in the Eurozone services sector rose for a fifth consecutive month to 6.1 in September 2026, its highest level since January, up from 5.6 in August. Among the bloc’s largest economies, confidence improved in Germany (7.1 vs 5.7), France (-2.5 vs -3.4) and the Netherlands (6.1 vs 4.7), while it weakened in Italy (4.1 vs 7). The assessment of demand over the previous three months increased to 8.2 from 5.2, while expectations for demand over the next three months eased to 8.2 from 9.5. Meanwhile, selling-price expectations edged down to 13.6 from 14, while employment expectations for the next three months also weakened slightly, to 1.4 from 1.6. Uncertainty, however, increased to 14.6 from 12.6.

The index measuring service sector confidence in the Eurozone rose to 5.8 in August of 2026 from the upwardly revised 5.1 in the previous month, the highest in seven months, and contrasting with expectations that it would ease to 4.9. The result extended the recovery in business conditions in the currency bloc after the outbreak of war in the Middle East halted energy supply from the region and triggered inflationary pressure that resulted in tighter monetary policy. Improvements were noted in the assessment of business over the last three months (2.4 vs 1.6 in July) and expectations on incoming demand for the next three months (10 vs 9). Meanwhile, selling price expectations rose to 14.1 from 13.7.

The index measuring services sector confidence in the Eurozone rebounded to 3.2 in June of 2026 from 2.6 in the previous month, the highest since March, and slightly ahead of market expectations of 3. Expectations on the evolution of demand improved to 7.3 from 5.4 in May, supported by expectations of softer cost inflation as energy prices fell from their peaks on signs of restored supply from the Middle East. Consistently, selling price expectations dropped 14.1 from 16, and the uncertainty gauge fell to 15.3 from 16.5. The improvement in overall sentiment was supported solely by expectations of a better macroeconomic backdrop, as the evolution of demand (3.0 vs 2.9) and business situation (-0.6 vs -0.6) in the last three months were loosely unchanged.