Eurozone PMI Manufacturing was finalized at 33.4 in April, down from March’s 44.5. Markit said that coronavirus related measures impacted heavily on demand and production. Also, confidence sank to record low and job losses mount. Readings for all major member states are deep in contractionary region. Greece, Italy, France, Austria hit record low. Spain, Germany, Ireland and the Netherlands hit lowest level in more than a decade.
Chris Williamson, Chief Business Economist at IHS Markit, said: “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 in terms of the virus impact on the economy, meaning the rate of decline will now likely start to moderate. 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, the PMI is indicating an industrial sector that has collapsed at a quarterly rate of decline measured in double digits, and any recovery will be frustratingly slow. Steps needed to keep workers safe will mean even businesses that are able to restart production will generally be running at low capacity, and most will be operating in an environment of greatly reduced demand. Not only will household spending remain historically weak, not least due to ongoing shop closures, but business spending on inputs and machinery and equipment will also remain subdued for some time.”
