Business activity in the euro area dropped dramatically in March on the back of the economic damages caused by the outbreak of the Covid-19 pandemic.
The Composite PMI, including both manufacturing and services sectors, fell to 31.4, the lowest level since the index’s creation in 1998, from February’s 51.6. That was even worse than the financial crisis and the euro area debt crisis.
Travel, tourism and restaurants pushed the services measure down sharply to 28.4 from 52.6 in February, while the factory gauge slipped to 39.5, the lowest level in 131 months, compared to 48.7 in February.
The dismal figures point to a quarterly contraction of approximately -2 percent, the IHS Markit report mentioned.
“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,” according to the IHS.
In the U.K., the services PMI slumped to 35.7 (53.2 in February) and the manufacturing retreated to 48.0 (51.7 in February), pushing the composite reading downwards to 37.1, the fastest contraction in at least two decades, from 53.0.
“With business closures and potential lockdowns, a recession of a scale we have not seen in modern history is looking increasingly likely,” said Chris Williamson, Chief Business Economist at IHS Markit.
As of 09:40 GMT, the euro traded lower versus the British pound at