Eurozone indicators to be released in the coming week are expected to reveal a rebound in German and French industrial output as well as a pickup in German manufacturing orders, economists said.
A rise in eurozone retail sales should also provide some reassurance that consumer spending is now contributing to the economic recovery, they added.
German industrial output is projected to have increased 1.0 percent in January following a 0.5 percent decline in December, with firmer energy production due to the cold snap offsetting weakness in construction activity.
"Data from the ... industry association as well as the improvement in the current conditions of the Ifo business climate index point to a sizeable rebound in January orders after a weak December result," said Holger Schmieding of Bank of America.
Manufacturing orders are expected to have rebounded 1.3 percent in January after falling 1.6 percent, with the year-on-year growth rate in orders climbing to 8.9 percent from 3.8 percent. The December decline followed a run of exceptionally strong increases and a recovery in January would be in line with recent strong sentiment surveys.
"Sentiment in the manufacturing sector continued to firm into the new year, suggesting that demand has remained strong.
"A continued rise in output and orders would also be consistent with a robust out-turn for first quarter GDP," Credit Suisse economists said
Like Germany, France is expected to report stronger industrial production for January, with output increasing 0.4 percent month-on-month and manufacturing output up 0.5 percent.
Across the 12-nation eurozone, retail sales are expected to have increased 0.7 percent month-on-month in January following strong figures from Germany and France.
"The 2.7 percent monthly rebound in German retail sales and the 0.9 percent gain in French household consumption of manufactured goods points to a significant rise in eurozone retail sales," said Schmieding of Bank of America.
Nick Matthews of Barclays Capital said recent revisions to German data could also lead to an upward revision to eurozone retail sales figures. Eurostat previously reported that eurozone retail sales edged up just 0.1 percent in December.
Germany's trade surplus is meanwhile expected to have risen to 12.8 billion euros in January, moving back into line with its monthly average after slipping to a relatively weak 9.2 billion euro in December.
France by contrast is believed to have posted another sizeable trade deficit in January after a 3.1-billion-euro shortfall in December.
As in other eurozone countries, Italian growth is expected to have slowed in the fourth quarter, with GDP increasing just 0.1 percent quarter-on-quarter after a 0.3 percent third quarter increase.
BNP Paribas economists said the 0.7 percent fourth quarter decline in industrial production was likely to have depressed GDP growth by 0.2 percentage points.
Comments
Comments are closed.