Manufacturing in March showed signs of rebound

Industrial output in March, on a seasonally adjusted basis, grew 0.4%, following zero growth in February. This was mainly driven by the performance of commodities and helped by individual manufacturing industries, the information and analytical report ‘Economy: Facts, Assessments, Commentary’ says in its April issue.

The labour market retained stability, while unemployment remained at low levels and the nominal wage growth rates in 2016 Q1 were higher than in Q4 last year, on the back of improvements in the financial state of companies. Nonetheless, this acceleration of nominal salaries has so far failed to boost consumer demand. Retail turnover in March posted a continued decline, evidencing to a high propensity of households to save as consumer confidence remained low.

Estimates suggest that annualised GDP decline rates in the first quarter of the current year are about 2%, with a drop of 1%-1.5% envisaged for Q2.