FIRST estimates show that the eurozone grew by 0.1 per cent in the first quarter, according to Amsterdam bank ING (International Netherlands Group), reports Hellenic Shipping News Worldwide.

While supply-side issues in industry have now been resolved, an inventory overhang and weak new orders are putting a lid on output growth led by "stagnation" in Germany, said ING.

"The strong decline in German industrial production in March is a warning sign, and sentiment indicators for April show that the eurozone industry weakened further in the first month of the second quarter," it said.

"Both order books and export orders softened in April, which doesn't bode well for the months ahead. Meanwhile, order books in the interest rate-sensitive construction sector also deteriorated in April, for the fourth month in a row.

"If it weren't for services, we would probably already have to start thinking about a recession. To some extent, consumers are still in a post-Covid mood, spending essentially on services rather than on goods.

"Retail sales turned out to be very weak in March. But the assessment of demand in the services sector is significantly above its long-term average. And expected services demand for the months ahead rose for the second month in a row in April. So, for the time being, growth hinges essentially on the consumer," said the bank.

"Unemployment is still very low and with the structural tightness of the labour market, a strong increase in unemployment looks unlikely. At the same time, hiring intentions are weakening.

"Headline inflation rose to seven per cent year on year in April, though core inflation fell to 5.6 per cent. These are not figures that will convince the ECB [European Central Bank] that inflation is under control," said the report.