Preliminary data published by the Bank of Spain shows that Spanish economic growth accelerated in the first quarter of this year as GDP rose 0.4 per cent from the previous quarter, when the economy notched up 0.2 per cent. The first quarter performance exceeded the 0.3 per cent estimate of in a Bloomberg News survey. GDP rose 0.5 per cent from the same period last year. The first quarter GDP figure means that Spain is on track to achieve a 1.2 per cent expansion this year, the Bank of Spain said.

In the meantime, business activity across the euro area during April improved at its fastest rate in almost three years.

A monthly survey data by Markit Economics showed that the composite purchasing managers’ index (PMI) unexpectedly rose to 54.0 from 53.1 the previous month. This month’s reading was the highest since May 2011 and exceeds the median estimate in a Bloomberg News survey that predicted the PMI to fall slightly to 53. A reading above 50 indicates expansion.

The eurozone PMI has now been above the 50.0 level for 10 months in a row, adding to a trend of continued expansion of business activity that started last July. The report supports ECB president Mario Draghi’s view that the 18-nation euro area is in a “modest” recovery.

Finally, sales of newly-built homes in the US experienced a surprising drop in March as a surge in prices helped drive down sales. This is the latest evidence that the housing market is struggling to regain momentum.

Figures released by the Commerce Department last week show that sales of new single-family homes fell in March by 14.5 per cent from February to a seasonally adjusted annual rate of 384,000. This was the lowest annual rate since last July, though the changes for January and February were revised higher.

Analysts fear the US housing recovery may be faltering as buyers are being discouraged by record prices and higher mortgage rates that are making properties less affordable.

This article was compiled by Bank of Valletta for general information purposes only.