Posted on Mar 24, 2020
The coronavirus pandemic is devastating Eurozone business activity as it sweeps across Europe, and shops, restaurants, bars, gyms, and offices pull down the shutters, Reuters reports.
“Business activity across the euro zone collapsed in March to an extent far exceeding that seen even at the height of the global financial crisis,” said Chris Williamson, chief business economist at IHS Markit.
“Steep downturns were seen in France, Germany and across the rest of the euro area as governments took increasingly tough measures to contain the spread of the coronavirus.”
“The March PMI is indicative of GDP slumping at a quarterly rate of around 2%, and clearly there’s scope for the downturn to intensify further,” Williamson said.
Activity in the bloc’s dominant services industry contracted at the steepest rate in the survey’s more than two-decade history. Its PMI nose-dived to 28.4 from 52.6, below all forecasts in a recent poll by Reuters.
Firms turned to cutting prices for the first time in over three years and optimism tumbled to a survey low. The business expectations index stood at 34.8 compared with last month’s 61.3.
So far factories have been less badly impacted, with the manufacturing PMI dropping to 44.8 from 49.2 - its lowest since July 2012, however manufacturers across the Eurozone have now cut staff, reduced raw material stocks and completed backlogs of work as demand tanked.
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