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Eurozone manufacturing plunges as Covid-19 takes toll

By Sean Farrell

Date: Wednesday 01 Apr 2020

Eurozone manufacturing plunges as Covid-19 takes toll

(Sharecast News) - Manufacturing output in the eurozone shrank at the fastest pace since the 2009 global recession as the coronavirus crisis forced factories to close.
The IHS Markit purchasing managers' index (PMI) of manufacturing activity fell to 44.5 in March from 49.2 in February as Covid-19-related shutdowns pushed output and orders lower. The drop in the final reading was slightly bigger than expected and took the score below an earlier estimate.

Output fell at the fastest pace since April 2009 when the world was gripped by a recession in the wake of the financial crisis. Manufacturers cut jobs at the fastest rate for more than a decade and confidence about the future hit a series low.

Worse is expected as factory shutdowns and other measures imposed by governments to stem infections take full effect.

All country level PMIs were lower in March than February. Italy was worst-hit, dropping to a 131-month low, followed by Ireland on a 127-month low and Spain whose activity was the lowest for 83 months.

Chris Williamson, IHS Markit's chief economist, said: "The concern is that we are still some way off peak decline for manufacturing. The coming weeks will likely see both business and consumer spending on goods decline markedly as measures to contain the coronavirus result in dramatically reduced orders at those factories still operating.

"Company closures, lockdowns and rising unemployment are likely to have an unprecedented impact on expenditure around the world, crushing demand for a wide array of products."





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