Industrial production fell at a monthly rate of 1.3% in April for the second consecutive month instead of double that at the beginning of the year. The leading indicators continued to improve in all markets: Italy and France are even well positioned to record an increase in industrial activity, given the insufficient stock levels in the industrial sector; this is absolutely not the case in Germany.

However, the perception of the current situation still remains as bad and the industrials’ order books, both foreign and domestic, are becoming still more depleted. In addition, businesses' profits plummeted in Q1, due to the delayed turnaround in employment figures; they are likely to continue to fall at a quarterly rate of 1.2% as in Q1 2009.

Under the impact of the slump in productivity of labour, unit labour costs accelerated rapidly, exceeding an annual high of +4.3% in Q4 2008 to reach +5.6% in Q1 2009, while businesses’ value-added prices fell by 0.2% in Q1, which is exceptional in the context of the fall in the price of raw materials: businesses cannot pass on the explosion in their payroll costs to their sales prices due to deflationary pressures, which the exponential rise in unemployment from 9.4% today to 11% by the end of the year will only intensify. The rate of the fall in GDP is likely to reduce appreciably from -2.5% to -1.5%.

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