Eurozone indicators to be released this week will show German and French industrial activity remained subdued in April, bolstering evidence of a slowdown in economic growth, while British data also will highlight a cooling economy, experts say. Industrial output in Germany, the eurozone's biggest economy, is expected to rise 0.5 percent in April after two months of declines.
But James Ashley and Nick Matthews of Barclays Capital said the increase would just be the result of a strong correction in construction activity after unfavourable weather conditions hit construction in February and March.
"Output excluding construction is projected to be weaker as manufacturing production falls slightly," they said.
Lorenzo Codogno of Bank of America said the underlying trend in German output would still show a weakening trend. "Recent indicators are hardly encouraging," he said.
German manufacturing orders, meanwhile, are expected to decline 1.0 percent after the unexpected 2.1 percent surge recorded in March.
"Survey data does not augur for strong orders," said Ed Teather of UBS.
Codogno said the assessment of orders in the Ifo survey collapsed in April, and the German manufacturing Purchasing Managers Index (PMI) gives a similar message.
French industry is seen faring no better, with no significant improvement in output expected after the declines of February and March.
Industrial output is expected to edge up 0.1 percent in April, while manufacturing output is seen easing 0.1 percent.
"The latest manufacturing PMI, INSEE report and Bank of France survey all point to further weakness in April and possibly a contraction within the manufacturing sector for the second quarter overall," said Jonathan Hoffman and Nathalie Dempster of Royal Bank of Scotland.
Meanwhile, Italy's second estimate for first-quarter gross domestic product (GDP) will confirm that the country is in recession, but the breakdown for the data which will be provided for the first time could give some clues on prospects for recovery.
"The breakdown will be key for a clearer picture of the short-term prospects. The fourth quarter saw strong stock accumulation. We suspect this will have been at least partially reversed in the first quarter, playing an important part in the sharp decline in GDP," BNP Paribas economists said.
There is also the possibility that first-quarter GDP could be revised up from the initial estimate of a 0.5 percent decline.
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