Portugal's Builders Have Not Been This Confident Since 2001, While Household Sentiment Slipped Back in August

Confidence among Portuguese construction firms reached its highest level in more than 24 years in August, while household confidence gave back part of a three-month recovery, according to the monthly business and consumer surveys published on Friday by the Instituto Nacional de Estatística (INE, Statistics Portugal).

The construction and public works confidence indicator rose to 6.1, from 5.1 in July and 3.6 in June. INE describes it as the highest reading since January 2002; the last month the series stood at or above 6.1 was December 2001. Both of the indicator's components pulled in the same direction, with builders reporting better order books and expecting to add staff over the next three months.

The rest of the business picture

The broader economic climate indicator, which pools the four business surveys, edged up to 2.9 percent from 2.8 percent in July, recovering the ground it lost the month before. Underneath that number the sectors moved apart:

• Construction and public works: up to 6.1, a 24-year high.
• Services: up to 8.6 on a seasonally adjusted basis from 7.4, on stronger order books.
• Trade: down to 1.5 from 2.3, a second consecutive monthly fall, weighed by current stock levels and a weaker three-month outlook.
• Manufacturing: down to minus 4.7 from minus 4.1, also a second straight fall, driven entirely by production expectations.

Firms in trade, manufacturing and construction all expect to raise selling prices; only services expect to lower them.

Households pull back

The consumer confidence indicator slipped to minus 20.1 in August from minus 19.5 in July, ending a run of increases that had begun in May. Some perspective on the scale: the reading bottomed at minus 29.4 in April and started the year at minus 13.7, so August's move is a small step back rather than a reversal.

The negative contributions came from expectations for the country's economic situation over the next twelve months, from plans for major household purchases, and from the outlook for household finances. Working the other way, households were more positive about how their finances had actually performed over the past year, a gap between lived experience and expectation that has persisted through 2026.

Price perceptions moved in two directions. The balance of opinion on how prices have behaved recently has fallen for four straight months, after April produced the sharpest increase in that measure since May 2008. Expectations for future prices, however, rose in August after falling steadily from April.

Portugal remains well below the euro area on household sentiment, where the equivalent seasonally adjusted reading stood at minus 15.5 in August.

Confidence and contracts are not the same thing

The construction number deserves a caveat. Confidence surveys measure what firms expect, not what they have signed. Portugal put €4.9 billion of public works out to tender through July, 28 percent below the same period last year, even though July itself was the strongest single month of 2026. A sector at a 24-year confidence peak while public tendering runs more than a quarter down suggests the optimism is coming from order books already held, from private and residential work, and from the rail and airport pipelines rather than from a flood of new state contracts.

What this means for foreign residents

• Building and renovating: Builders expecting fuller order books and planning to hire are builders with less reason to discount. Quotes for renovation work are unlikely to soften this autumn.
• Prices: Retailers, manufacturers and builders all told INE they expect to raise selling prices. That is a forward signal, not yet inflation, but it points the same way.
• Household budgets: The components that fell are the forward-looking ones, including intentions to make large purchases. Portuguese households are still holding back on durable goods.
• Reading the series: These are balances of opinion, not growth rates. A move from minus 19.5 to minus 20.1 is noise-adjacent; the construction reading is the genuinely unusual number in this release.

The surveys were run between 3 and 14 August for consumers, with 1,200 telephone interviews, and between 1 and 24 August for firms, with 1,365 responses from industry, 1,353 from services, 1,225 from trade and 632 from construction. INE's June release had business sentiment improving for a third month while consumers stalled. Two months on, that split has widened rather than closed.