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Summing up, the Euro Area ESI (Economic Sentiment Indicator), as expected, adjusted in April, -320bpMoM and Portugal: -310bpMoM; both mainly due to lower Consumer Confidence, as the Middle East war and higher petrol prices are impacting. Consumer Confidence adjustment is not unusual, in this environment, probably most worrying is Services confidence adjustment in April in the Euro Area.      

The European Commission released yesterday April’s monthly surveys, Euro Area (EA) and countries, namely Portugal.

The main highlights are the following:

1 – April Euro Area Economic Sentiment Indicator (ESI) adjusted, -320bpMoM to 93.0 (-1.8% YoY) vs. 12MMA (12 month moving average) 96.3 and 3MMA: 95.7;      

2 – Concerning the sub-components, Consumer Confidence suffered, -420bpMoM, to -20.6, (3MMA: -16.5 and 12MMA:  -14.1) and Services (-320bpMoM) while Industry slightly adjusted              ;   

3 – The Portuguese ESI also underperformed, -310bpMoM to 100.4 (-0.9%YoY), compares with 12MMA: 104.3 and 3MMA: 102.7;

4 – Regarding the subcomponents in Portugal, Consumer Confidence also suffered, -340bpMoM to -28.8, clearly below moving averages and in line with the figures recorded over the years 2020, 2022 and 2023;

5 – Separately, the Polish ESI was also released, -80bp MoM to 100.2 (-0.5%YoY). It compares with 12MMA: 100.4 and 3MMA: 100.9.

Our comments: The Euro Area and Portuguese ESI adjusted in April, mainly due to Consumer Confidence, two months in a row and Services poor performance, namely at Euro Area, clearly impacted by the Iran war. Consumer confidence underperforming in this environment is not unusual, probably most worrying is Services confidence adjustment.    

Source: Bank of Portugal, European Commission, AS Independent Research