ZAGREB, 28 May (Hina) - Economic sentiment in Croatia strengthened in May, buoyed by renewed optimism in the industrial and construction sectors, the European Commission’s monthly survey revealed.
The Economic Sentiment Indicator (ESI) for Croatia rose by 0.9 points compared to the revised April figure, reaching 104.4 points.
This improvement marks a rebound following a dip in March, when the index fell to its lowest level since August 2023, reflecting a wave of spring pessimism.
The most significant boost came from the industrial sector, where the index increased by 1.1 points, reflecting much more optimistic production expectations in the months ahead.
Business leaders in both construction and services also reported a more favourable outlook, with the index rising by 0.9 and 0.7 points respectively. Construction activity has notably picked up, and service sector performance over the past three months was better than managers had anticipated in April.
Consumer confidence also strengthened, with a 0.6-point rise in the index, driven by expectations of improved household finances over the next 12 months.
In contrast, retail executives expressed marked pessimism, with the index dropping by 1.5 points. Business activity over the past three months deteriorated significantly, while inventories accumulated.
Hiring momentum across the economy is expected to slow in the coming months, with the Employment Expectations Indicator (EEI) down by 1.7 points. At the same time, economic uncertainty, as perceived by managers, has increased noticeably, with the Economic Uncertainty Indicator (EUI) rising by 1.3 points.
Italy leads euro area optimism
At the euro area and EU level, economic sentiment also improved in May, with the ESI up by one point in the euro area and 0.6 points in the EU.
Retailers recorded the strongest gains, with the index up by 1.9 points in the euro area and 1.4 in the EU.
Consumers across both regions were also more upbeat, with a 1.4-point increase in sentiment. Industrial sentiment in the euro area rose by 0.7 points, while in the EU it remained largely unchanged from April.
The construction sector saw a modest lift in sentiment, with both areas reporting a 0.5-point rise, while the service sector outlook held steady.
Hiring expectations in the euro area and EU also improved slightly, with the EEI up by 0.5 and 0.6 points respectively. Perceived economic uncertainty eased considerably, with the EUI falling by two points in the EU and 1.9 points in the euro area.
Among the euro area’s largest economies, Italy recorded the sharpest rise in sentiment, with its ESI climbing by 2.8 points from April. Germany followed with a 1.5-point increase. France, however, saw a sharp deterioration, with the index dropping by 3.5 points.
Among large economies outside the euro area, Poland registered a slight decline, with the ESI down by 0.6 points.
