Sharp fall in Italy's Aug consumer confidence clouds prospects for the stuttering economy

Preliminary data from ISTAT showed Monday that Italy's consumer confidence fell to its lowest level in over a year and business sentiment reached an 18-month low in August. The consumer confidence index decreased to 109.2 from 111.2 in July, missing expectations for a score of 110.3. July's data was revised from 111.3. August reading was the lowest since July last year.

The steeply falling consumer morale further clouded prospects for the stuttering economy. Italy's economy underperformed the rest of the currency bloc in Aug when growth stagnated in the second quarter.

Details showed that all sub-indexes declined and fears of unemployment rose. The manufacturing sentiment index fell to 101.1 from 102.9 in July, missing consensus for a score of 102.4. Order book assessments and production expectations also worsened. Confidence also eased in the construction, market services and retail trade sectors.

ISTAT's composite business morale index, combining surveys of the manufacturing, retail, construction and services sectors, dropped even more steeply in August to 99.4 from 103.0, also posting its lowest level since February last year.