Portugal: Economic outlook remains murky
September 30, 2011
Economic activity improved somewhat in August, with both retail sales and industrial output recording gains. In August, industrial output jumped 8.3% over the previous month (-0.5% year-on-year), while retail sales rose 0.9% month-on-month in August (-4.6% yoy). However, leading indicators for consumption and investment remained subdued in September. Consumer confidence fell from minus 49.1 points in August to minus 53.9 points in September, which represented its lowest reading in five months. The September reading reflected a deterioration in virtually all components of the survey, in particular the savings perspectives and the perspectives on the evolution of the domestic economy. Simultaneously, business confidence deteriorated further from minus 16.6 points in August to minus 20.7 in September, which represented its lowest level since July 2009. Moreover, the 3-month moving average of the economic climate indicator continued the downward trend in place since July 2010, falling from minus 2.4 points in August to minus 2.7 points in September. The deterioration in business confidence does not bode well for a rebound in the industrial sector in the coming months.