German factory and service company indexes unexpectedly dropped to show contraction, suggesting weakness in the euro region is persisting into the second quarter.
A gauge of manufacturing from a survey by Markit Economics fell to 47.9 from 49 the previous month, while the median result of 29 economists in a Bloomberg News survey was for no change. For services, the index fell to 49.2 from 50.9. Economists had predicted an increase to 51. Readings below 50 show contraction.
For the euro area, a composite index based on a survey of purchasing managers in both industries probably held at 46.5, according to the median of 26 economists’ forecasts in a Bloomberg News survey. That number will be released today at 9 a.m. in London.
The Bundesbank said yesterday that sluggish industrial production and cold winter weather may have delayed Germany’s economic recovery, which it had forecast for the first quarter.
“While the industrial sector didn’t provide any growth impulses in the first quarter of 2013, services should have expanded,” the Frankfurt-based central bank said in its monthly report. “Against this backdrop, growth seems possible. But that assumes that the impact of especially cold winter weather, which was apparent in the construction sector, remained contained within tight limits.”
German business confidence probably declined for a second month in April, according to the median of 44 forecasts in a Bloomberg News survey. Germany’s Ifo research institute will publish that report tomorrow at 10 a.m.
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