Business activity in the euro area saw the steepest decline ever in April 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 an all-time low of 13.5 in April from March’s reading of 29.7. That was even worse than the financial crisis and the euro area debt crisis.
Travel, tourism and restaurants pushed the services measure down sharp to 11.7 from 26.4 in March, while the factory gauge slipped to 18.4 this month from 38.5 a month earlier.
The dismal figures point to a quarterly contraction of approximately 7.5 percent, the IHS Markit report mentioned.
“Our model which compares the PMI with GDP suggests that the April survey is indicative of the eurozone economy contracting at a quarterly rate of approximately 7.5%,” according to the IHS.
In the U.K., the services slumped to 12.3 (34.5 in March) and the manufacturing retreated to 32.9 (47.8 in March), pushing the composite reading downwards to 12.9 from 36.0. It’s the worst reading since Markit started recording this data more than two decades ago.
The sharp fall in both manufacturing and services companies confirmed that the Covid-19 lockdown is pushing the UK into a severe recession.
As of 08:45 GMT, the euro traded lower versus the British pound at 0.8740,
compared to the session’s open at 0.8775.