Euro Area GDP Growth Rebounded In First Quarter, Industrial Production Eased In March

Bridgette Randall
15 May, 2024
Frankfurt

European market indexes advanced and extended further into record territory after the release of the GDP, employment, and industrial production data. 

Benchmark indexes in Paris, London, and Frankfurt advanced between 0.2% and 0.5%, and the euro strengthened against the dollar and other leading currencies. 

 

The Eurozone Economy Expands in the First Quarter 

Seasonally adjusted GDP in the first quarter rose 0.3% from the previous quarter, Eurostat, the statistical office of the European Union, reported in its flash estimate on Wednesday. 

The economy expanded in the first quarter after shrinking in the previous two quarters in a row by 0.1%, when measured on a quarterly basis. 

GDP in the first quarter rose 0.4% from a year ago, faster than the 0.1% annual increase in the fourth quarter of 2023. 

GDP in Germany contracted for the third quarter in a row by an annual 0.2%, in France it expanded by 1.1%, in Spain by 2.4%, and in Italy by 0.6%. 

Ireland led the currency union with a decline of 4.9%, Estonia by 2.1%, and Austria by 1.3%. 

 

Employment Growth Slowed In the First Quarter

The statistical agency also said the number of employed persons in the eurozone increased by 0.3% from the previous quarter to 169.8 million. 

From a year ago, the total number of people on the payroll increased by 1.0%, slower than the 1.2% increase in the fourth quarter. 

Employment in Germany increased by 0.2%, in France by 0.2%, and in Italy by 0.3%. 

 

Eurozone Industrial Production Eased in March

Seasonally adjusted industrial production rose 0.6% from the previous month in March, according to the first estimate released by the statistical agency on Wednesday. 

On an annual basis, industrial production declined by 1.0% in both the Euro Area and the European Union. 

Industrial production of energy decreased by 3.5%, intermediate goods fell by 2.3%, durable consumer goods dropped by 8.3%, non-durable consumer goods declined by 7.0%, and capital goods increased by 1.8%. 

The largest annual decreases in industrial production were recorded in Finland by 7.7%, in Bulgaria by 7.6%, and in Austria by 7.0%. 

The largest increases were observed in Ireland by 37.0%, in Cyprus by 8.5%, and in Romania by 3.5%.

 

Europe Indexes and Yields

The DAX index increased by 0.5% to 18,810.12; the CAC-40 index rose by 0.2% to 8,213.46; and the FTSE 100 index inched higher by 0.3% to 8,451.14.

The yield on 10-year German bonds edged down to 2.47%; French bonds inched lower to 2.98%; the UK gilts edged lower to 4.11%; and Italian bonds inched lower to 3.80%.

The euro edged higher to $1.082; the British pound inched higher to $1.252; and the U.S. dollar eased to 90.50 Swiss cents.

Brent crude increased $0.10 to $82.48 a barrel, and the Dutch TTF natural gas rose by €0.50 to €30.23 per MWh.

 

Europe Stock Movers

InPost increased 10.4% to €16.83 after the Polish parcel delivery company reported that its first quarter core profit surged by 36%. 

ABN AMRO Bank declined 3% to €16.18 after the Dutch bank reported weaker capital ratios in the first quarter following the rise of risk-weighted assets, which overshadowed strong earnings. 

The bank's CET 1 ratio, a measure of the bank's own capital to risk-weighted assets, decreased to 13.8% in the first quarter from 15.0% a year ago. 

Net interest income in the quarter decreased 2% from a year ago to €1.59 billion, and the bank guided 2024 to a net interest income of €6.3 billion. 

One of the three largest banks in the Netherlands said higher staffing expenses are likely to increase total costs to €5.3 billion. 

However, the bank's profit in the first quarter increased by 29% to €674 million, ahead of the market estimate of at least €510 million. 

The bank also confirmed the completion of the €500 million stock buyback plan it launched in February. 

Neste Oyj dropped 19.4% to €19.40 after the Finnish biofuel maker lowered its 2024 margin estimate for renewable energy products. 

Vodafone Group increased 3.6% to 76.16 pence after the struggling telecom carrier launched a €500 million stock buyback plan. 

Britvic Plc soared 7.7% to 988.0 pence after the British beverage maker said revenue and profit in the first half increased and the company announced a £75 million stock buyback plan. 

Hunting plc increased 22% to 454.0 pence on news that the engineering company won a new order worth $145 million from Kuwait Oil Company. 

ThyssenKrupp declined 1.9% to €4.83 after the German steelmaker lowered its annual sales and earnings outlook for the second time in three months.