The EU Commission Economic Sentiment Indicator rose in the eurozone from 91.3 to 92.5 in July, and remains 8.7 points below its long term average. The eurozone ESI has been on a upward trend since April this year and this month’s value is the highest since April 2012. The ESI rose in most countries, with some exceptions such as in Greece in in Italy. In the case of Italy the decline appears to be a normal correction as the indicator jumped by 19 points over May and June. The moderate improvement in confidence over the spring and the summer suggests that the European Economy may be stabilising at low levels.
In Portugal, the ESI rose 0.9 points to 87.7 in July despite the political uncertainty of the last few weeks. The indicator is now just over 12 points below its long term average and has hovered around these levels over the last 9 months, as declining confidence in the service sector has been offset by an improvement in consumer confidence.
Barring any significant bad news on the political or economic front we now expect confidence indicators to improve gradually over the summer and the fall, thanks to stronger growth in Europe.
Meanwhile, industrial production was up 2.1%yoy in June. The indicator appears to be on a clear upward trend, with growth averaging 0.9%yoy in the first semester of 2013.