A rebound in exports and a jump in construction activity in Germany, Europe’s biggest economy, and expectations US job losses would ease provided more signs on Friday the global recession may be easing.
Data showing German exports rose in March for the first time in six months gave fresh encouragement to optimists pushing stock markets higher after results of stress tests on US banks revealed no nasty surprises.
“The German patient is on the road to recovery though he’s still sickly. However, slowly but surely, we’re seeing a bit of stabilization with the hard data,” said UniCredit economist Andreas Rees.
German industrial production figures added more fuel to arguments the severest post-war recession in the country’s history is close to bottoming out. Industrial output in March was unchanged, avoiding a decline for the first time in seven months as a jump in construction activity offset a drop in manufacturing.
“Today’s industrial production numbers offer some relief for German industry... Looking ahead, the green shoots are there,” said economist Carsten Brzeski at ING Financial Markets.
In Britain, data showed that factory gate inflation dropped to a 5-year low last month, while input prices fell at their fastest annual rate in nearly seven years, suggesting inflation remains on a downward track.
COMPANIES STILL SUFFERING
But positive economic indicators -- including a dip in US jobless claims on Thursday -- are not yet filtering through to company results. Britain’s Royal Bank of Scotland (RBS) and Germany’s Commerzbank posted Q1 losses, the latest big European banks to say this week that bad debts were ratcheting up.
Part-nationalized RBS reported a loss for the Q1 as strong growth at its investment banking arm mitigated the impact of impairment losses and credit market writedowns totaling £5 billion ($7.52 billion).
Commerzbank, Germany’s second-largest bank, posted a bigger-than-expected net loss of €861 million ($1.15 billion), but pledged to rebound from recession in three years. (Reuters)