Daily Economic Outlook: 12th June, 2015

Having expanded by 0.4% in Q1, the euro zone economy is expected to post another firm quarter of growth in Q2. Industrial production data for April will help gauge the extent of the improvement in the activity outlook at the start of Q2. Regional outturns have been mixed with stronger-than-expected readings from Spain and Germany offset by disappointing outturns from Italy and France. On balance, a firm overall print still seems likely and we look for euro area industrial output to have risen by 0.4% in April, stats Lloyds Bank. 

In the UK, following the better-than-expected industrial production data earlier this week - which suggested that activity started the second quarter on a solid footing - construction output data for April will provide additional insight into the prospects for Q2 GDP. Despite the 3.9% rise in March construction activity, over the quarter, output was reported to have contracted by 1.1%. 

ONS estimates of monthly construction output are often heavily revised and survey-based sectoral indicators such as the PMI and BoE Agents' scores indicate some scope for an official reassessment of activity in Q1. With survey evidence remaining resilient, the near-term outlook is considered for activity in the sector to remain broadly firm, although for April, some retracement from the robust March outturn looks on the cards. As such, Lloyds Bank forecasts output to have dipped by 1.0% in April. Nevertheless, with modest gains expected over the remainder of the quarter, construction  seems likely to provide a positive contribution to overall output growth in Q2, consistent with a firming in the pace of overall GDP growth, added lloyds Bank.

In the US, having posted a 5.2pts decline last month, the University of Michigan consumer sentiment survey is expected to have rebounded this month in June supported by ongoing improvements in the labour market. While the headline reading to firm up to 92.5 from 90.7, the inflation expectations of the survey will also be closely watched, estimates Lloyds Bank.