Spain: Business confidence plummets
October 13, 2011
The quarterly business confidence index (ICE, Indicador de Confianza Empresarial) published by the Association of Chambers of Commerce (Consejo Superior de Camaras de Comercio) plummeted from minus 9.2 points in July to minus 19.0 points in October. The drop marked the first deterioration after two consecutive improvements and saw the index returning to levels comparable to those of 2010. With the quarterly deterioration, the index fell further below the 0-point threshold that separates optimistic from pessimistic territory, which does not bode well for economic activity in the last quarter of the year. The deterioration in business confidence was the result of a weakening in the expectations sub-index for the next three months (October-December), which plummeted from minus 5.9 points in July to minus 15.7 points in October. The deterioration reflected dire perceptions regarding future business prospects and unemployment, whereas exports remained unchanged. In addition, the current situation sub-index fell markedly, due to deteriorations across all categories.