Coronavirus pandemic drives record contraction in Eurozone manufacturing & services sectors

IHS Markit released its monthly report on the purchasing managers’ index (PMI) in March on Tuesday. The report covered data from France, Germany, and the Eurozone at large. Tuesday’s data was anticipated to be of high impact as it gave an insight into the broader impact of Coronavirus on the European economy.

According to Markit, the flash composite output index in France dropped to 30.2 in March versus 51.9 in February. Flash services activity index posted a wider decline to 29.0 in March as compared to 52.6 in February. The manufacturing output index recorded at 35.6 this month (132-month low) versus 49.0 last month while the flash manufacturing PMI in France printed at 42.9 in March (86-month low) versus 49.7 last month.

All in all, the data suggested massive contractions in all four indices in France due to the ongoing health emergency that has disrupted businesses and is pushing the global economy into recession.

Flash German Manufacturing And Services PMI

In Germany, the flash PMI composite output index dropped to 37.2 in March as compared to 50.7 in February that marked a 133-month low. The flash German services PMI activity index declined to 34.5 this month versus 52.5 last month (its worst reading in history). On the manufacturing PMI front, Germany recorded 45.7 in March (2-month low) down from 48.0 posted in February. The flash manufacturing output index in Germany was down to 42.2 in March (92-month low) from February’s 47.3.

According to IHS Markit, all four indices in Germany also contracted significantly in March due to the fast-spreading flu-like virus.

Data For The Greater Eurozone

Lastly, in the greater Eurozone, the flash PMI composite output index dropped to 31.4 in March versus 51.6 in February that marked the lowest since July 1998. The flash services PMI activity index saw a wider contraction to 28.4 this month (last seen in July 1998) as compared to 52.6 last month. The flash manufacturing PMI output index in the Eurozone in March posted 39.5 (131-month low) versus February’s 48.7. At 44.8 in March, the Eurozone flash manufacturing PMI noted a 92-month low. In February, the flash manufacturing PMI was recorded at 49.2.

Tuesday’s data showed that the manufacturing and services sectors in the Eurozone remained under pressure due to the Coronavirus pandemic.

The forex market has not responded aggressively to the data so far. Eur/Usd is exchanging hands at 1.0820 at the time of writing.