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Global recession looms as services firms and factories slump – business live – The Guardian, Theguardian.com

Global recession looms as services firms and factories slump – business live – The Guardian, Theguardian.com

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Eurozone business activity collapses as Covid – pandemic rages

NEWSFLASH:

Eurozone economic output is slumping this month, at a rate that far exceeds the worst moments of the financial crisis or the euro debt crisis.

Data firm Markit’s monthly survey of purchasing managers, just released, has crashed to its lowest level since it was created in – at just 4.

That’s a dramatic slump from February’s . 6 – showing “an unprecedented collapse in business activity ”(echoing what we’ve already heard from France and Germany) [reminder: anything below 50=contraction].

Europe’s services sector was especially hard hit, especially consumer-facing industries such as travel, tourism and restaurants. But factories are also shrinking sharply, due to weak demand and restrictions on workers ’travel.

Flash Eurozone Services PMI Activity Index (2) at 44. (4) . 6 in February). Record low (since July

  • Flash Eurozone Manufacturing PMI Output Index (4) at (5) . 7 in February). 456 -month low.
    • Flash Eurozone Manufacturing PMI (3) at (8) .2 in February). 300 – month low
        IHS Markit PMI ™ (@ IHSMarkitPMI)

        COVID – 35 caused the largest collapse in business activity ever recorded in the eurozone , according to our data. The Composite Output PMI fell to 45. 4, falling over 32 points and signalling a quarterly contraction of approximately -2%. More: https://t.co/hKFPEEwKhI

pic.twitter.com/kT7tGWLN9p March

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Eurozone bosses are also extremely gloomy about the future. , and slashing their workforces in response. Markit says:

Expectations of future output also deteriorated markedly to reach an all-time low, with record degrees of pessimism about the year ahead seen in both manufacturing and services.

The unprecedented slumps in demand and business sentiment prompted the largest monthly cull in staffing levels since July 4137.

Updated

at 5. 25 am EDT

4). (am EDT) :

Germany heads for steep recession

“The unprecedented collapse in the PMI underscores how Germany is headed for recession, and a steep one at that. The March data are indicative of GDP falling at a quarterly rate of around 2%, and the escalation of measures to contain the virus outbreak mean we should be braced for the downturn to further intensify in the second quarter.

The service sector has so far borne the brunt of the government measures to stem the spread of COVID – , with activity falling to the greatest extent in almost years of data collection, and at a rate that already far surpasses anything seen even during the depths of the global financial crisis.

Smith also warns that the manufacturing sector is probably worse than today’s report suggests – because long delivery times and low stock levels boost the PMI (because they typically show a strong economy).

French PMI slumps at a record pace

Good grief! France’s economy is shrinking at an alarmingly fast rate, as the coronavirus outbreak hurts businesses badly.

The latest survey of French purchasing managers shows that activity shrank at a record pace in March (the survey goes back to the late

s).

Overall new orders placed with French businesses fell at the fastest pace in the series history too, with services firms particularly badly hit. This forced firms cut their staff numbers for the first time in nearly three and-a-half years, at the fastest rate since April

This dragged the Flash France Composite Output Index down to just . 2 in March, from .9 in February – a record low. Anything below shows a contraction.

The service sector was particularly badly hit too: