Business in the eurozone has endured “an unprecedented collapse”over the last month. In data published today, IHS Markit has reported the “COVID-19 outbreak has lead to largest collapse in eurozone business activity ever recorded.”
With its lowest reading since the 1990s, the flash composite purchasing managers’ index indicates drops in the U.S. (49.6 to 40.5), the eurozone (51.6 to 31.4), and the UK (53 51.6 to 37.1), with a reading below 50 meaning “the majority of businesses reported a deterioration compared with the previous month.”
HIS Markit stated that “French business activity contracted at the sharpest rate in nearly 22 years of data collection the composite flash PMI sliding from 52.0 in February to 30.2. A record decline in service sector activity was accompanied by the sharpest drop in factory production since March 2009.”
France’s finance minister Bruno Le Maire, said today the current economic crisis was “comparable only to the great recession of 1929.”
Germany's business activity plummeted to its lowest since February 2009, from 50.7 in February to 37.2. “Germany saw a record deterioration of service sector activity and the largest drop in manufacturing output since July 2012.”
The report summarized, “The rest of the euro area reported an even steeper decline than seen in both France and Germany, led by comfortably the sharpest fall in service sector activity ever recorded, though manufacturing output also shrank at the steepest rate for almost 11 years.”
.Chris Williamson, chief business economist at IHS Markit, said that “it is unlikely that the index has hit rock bottom yet.”
The most hit sectors of activity in both the U.S. and the eurozone were hotels, restaurants, leisure-based activities, transport and travel.