The European Union’s economic sentiment remained broadly stable in May 2026, supported by improving consumer confidence despite continued weakness in industrial and retail sectors, according to the latest data released by the European Commission.
The Economic Sentiment Indicator (ESI) increased marginally by 0.3 points in both the European Union and the euro area, reaching 93.7 and 93.5 respectively. However, both figures remain below the long-term average benchmark of 100.
Meanwhile, the Employment Expectations Indicator (EEI) showed a stronger recovery compared to April. The indicator rose by 2.1 points to 95.4 in the EU and by 2.8 points to 94.7 in the euro area, reflecting cautious optimism in labour market expectations.
Among the EU’s largest economies, Germany recorded the highest improvement in economic sentiment with a 1-point increase, followed by France and Poland with gains of 0.9 points each. Italy remained nearly unchanged, while Spain and the Netherlands posted slight declines.
Industrial confidence in the EU weakened slightly during May due to deteriorating production expectations and concerns over rising stocks of finished products. Managers also reported weaker assessments of past production performance, although export order books remained relatively stable.
Consumer confidence, however, showed signs of recovery after sharp declines in April. Households became less pessimistic about their future financial conditions, planned major purchases, and the broader economic outlook of their countries.
Retail trade confidence continued to decline amid worsening assessments of stock volumes and past business conditions, although expectations for the next three months stabilised.
The report also noted that consumers’ unemployment expectations worsened further in May, signalling ongoing concerns about labour market stability.
On a positive note, the Economic Uncertainty Indicator (EUI) for the EU declined by 1.6 points to 21.1, indicating easing uncertainty among businesses and consumers regarding future economic conditions.
The latest economic indicators are closely monitored by the global textile and apparel industry, as the EU remains one of the world’s largest import markets for garments, textiles, and fashion products.
Source: European Commission
