Euro-area consumer confidence unexpectedly increased in April, adding to signs the currency bloc will emerge from a recession in the second quarter.
An index of household confidence in the 17-nation euro zone rose to minus 22.3 from minus 23.5 in March, the European Commission in Brussels said today. Economists had forecast a dip to minus 24, according to the median of 29 estimates in a Bloomberg News survey.
Record unemployment of 12 percent and spending cuts across the euro area have eroded consumer spending power even as inflation has fallen below the European Central Bank’s 2 percent ceiling for the first time in more than two years. Retail sales fell 0.3 percent in February, the last month for which data are available.
“Problems in the euro-area economic landscape still loom large” and “the way out is to restore competitiveness,” ECB President Mario Draghi said in Amsterdam on April 15. ECB Governing Council member Jens Weidmann said four days later the bank would only cut interest rates if economic data worsen.
The euro-area economy has contracted for five quarters and is forecast to shrink 0.1 percent in the first three months of 2013 before returning to growth, the median of 25 economists’ estimates in a Bloomberg News survey shows. The European Commission sees the economy shrinking 0.3 percent this year.
Akzo Nobel NV, the maker of specialty chemicals and Dulux paint, will look to make more cutbacks to offset a slump in Europe. Keith Nichols, Akzo’s chief financial officer, said on April 18 that the “trends of weaker demand” seen in 2012 have continued. “Europe remains weak,” he said. “We do not expect a quick rebound.”
Carrefour SA, France’s biggest retailer, on April 18 reported weaker first-quarter sales as cold weather and slow consumption in Europe weighed on demand. The retailer expects consumption to remain under pressure in Europe, said Chief Financial Officer Pierre-Jean Sivignon.
The commission is scheduled to publish the final numbers for April consumer confidence and the wider indicator of euro-area economic confidence on April 29.