Eurozone manufacturing output plunged at the fastest pace on record in April, survey data has confirmed, as coronavirus lockdowns caused production and trade to dry up.
The IHS Markit Eurozone manufacturing purchasing managers’ index (PMI), a gauge of the health of the sector, fell to 33.4 in April. This was the lowest score ever recorded in more than 20 years of the survey.
The reading was down sharply from March’s 44.5 and below the “flash” reading produced last week. A score below 50 indicates contraction.
Chris Williamson, chief business economist at data firm IHS Markit, said: “Euro area manufacturing output plunged to an extent greatly exceeding any decline previously seen in the near 23-year history of the PMI survey in April.”
He said the drastic drop in output reflected “a combination of factors including widespread factory closures, slumping demand and supply shortages, all linked to the Covid-19 outbreak”.
Europe has been badly hit by coronavirus, with a number of countries registering more than 20,000 deaths.
Lockdowns put in place to prevent the spread of the virus have been disastrous for the Eurozone economy. It shrank at the fastest pace in its roughly two-decade history in the first quarter and is set for a sharper contraction in the second.
Greece and Spain recorded the lowest manufacturing PMI numbers, IHS Markit said, followed by Italy and France.
Reacting to a huge slump in demand, Eurozone manufacturers slashed jobs at the fastest pace since 2009 in April.
Williamson struck a tone of cautious optimism, however. “With virus curves flattening and talk now moving to lifting some of the pandemic restrictions, April will have hopefully represented the eye of the storm,” he said.
“Barring any second wave of infections, which would throw any recovery off course, the news should start to improve as we see more people and businesses get back to work.”
However, demand is likely to remain subdued for some time and broken supply chains may prove hard to rebuild.
Worries among manufacturers about the longer-term impacts of coronavirus on the economy meant sentiment fell to a new series low in April.