Friday, business confidence in Germany recovered more than expected in April from a historic low recorded in March, a closely watched survey revealed, a sign that the pace of economic downturn will slow in the biggest Eurozone economy. Sinking into severe recession, the UK economy contracted more than expected in the first three months of the year, logging its biggest shrinkage since the third quarter of 1979 and casting doubts on the Chancellor's economic predictions. In other news, French consumer spending rose in March, reversing a decline seen in February on higher expenditure on automobiles and textiles.

Eurozone

The Munich-based Ifo Institute for Economic Research said its business climate index for Germany rose to 83.7 in April from 82.2 in March. Meanwhile, economists had expected a slight increase to 82.3.

The German Federal Statistical Office said the total price adjusted value of orders in the building industry dropped 17.5% year-on-year in February, after falling 24.4% in January.

According to the French statistical office INSEE, household spending rose 1.1% month-on-month in March after falling a revised 1.8% in February. Meanwhile, economists had predicted just 0.2% growth. Annually, spending climbed 0.6%.

The number of unemployed persons in Spain increased by 802,800 to 4.01 million in the first quarter from the previous quarter, the National Institute of Statistics said. The jobless rate stood at 17.36%, up from 13.91% in the fourth quarter.

Statistics Austria said manufacturing output fell a seasonally adjusted 3.6% month-on-month in February.

Consumer spending in the Netherlands fell 2.8% year-on-year in February, reflecting a 5.2% drop in spending on goods and a 0.8% decline in that for services, the Central Bureau of Statistics said. The agency also reported that the business confidence rose 3.4 points to minus 17.4 in April, compared to the minus 20.8 in March. Economists had predicted a reading of minus 20. This was the second consecutive month of increase in business confidence.

The CBS also said entrepreneurs in the Dutch industry expect 10% decline in investment this year. Previously, entrepreneurs were forecasting a 1% growth.

The Statistical Office of the Republic of Slovenia said the economic sentiment indicator dropped by 1 percentage point in April compared to the previous month. Additionally, the agency said tourist arrivals dropped 13% year-over-year in March, after falling 10% in February.

The Statistical Service of the Republic of Cyprus said that the revenue from tourism declined 14.8% year-over-year to EUR 57.4 million in March, compared with a 10.8% fall in the previous month.

Rest of Europe

Data released by the Office for National Statistics or ONS showed that UK's gross domestic product declined 1.9% in the first quarter, while economists were looking for a milder figure of 1.5%. The deterioration worsened from the final quarter of 2008, when the economy had shrunk 1.6%.

The latest contraction is the biggest since the early days of the Margaret Thatcher government in 1979. The GDP number has been in the red since the third quarter of 2008. Further, it is reportedly the worst six-month decline in GDP since the start of official records.

The slowdown was the result of both reduced services and production activity, the ONS said. This is the first instance after records commenced after World War II that the economy shrunk more than 1% for two quarters in a row.

Separately, the ONS said UK retail sales unexpectedly rose 0.3% month-on-month in March. Economists' were looking a decline of 0.3%. Retail sales had declined in February. Further, the agency announced that UK's service sector output dropped 1.2% in the three months to February compared with a 1.3% fall in the previous three months.

Elsewhere, UK's Society of Motor Manufacturers and Traders or SMMT reported that car production declined 51.3% year-on-year in March, after falling a record 59% in February. In March, 61,829 cars were produced.

Statistics Iceland announced that the wage index rose 5.5% year-over-year in March, smaller than the 6.7% growth in the previous month.

Statistics Lithuania announced that the export price index dropped 14.9% year-over-year in February, after falling 14.1% in January. Import prices decreased 12% year-on-year in February, after falling 10.5% in January.

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