Global manufacturing is in disarray as activity in Europe slumps to all-time lows, and Asia drops at its fastest rate since the financial crisis
- Manufacturing activity in the eurozone fell to its lowest level ever in April, while some Asian countries saw activity drop to levels not seen since the financial crisis as the coronavirus continues to batter economic activity.
- In Europe, manufacturing registered 33.4 on IHS Markit's PMI survey. That's the lowest level ever seen in the Eurozone, and follows news last week that the eurozone economy contracted 3.8% in the first quarter of 2020.
- Manufacturing activity in both South Korea and Taiwan also slumped to lows not seen since the financial crisis, IHS Markit data showed.
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Manufacturing activity in both the eurozone and parts of Asia fell to its lowest level ever in April as the coronavirus continues to batter economic activity.
A series of IHS Markit figures indicated that manufacturing activity has fallen to all-time lows, below anything seen during the financial crisis. Activity in the eurozone fell more than 25% compared to the previous month, when manufacturing was already in a contraction, the IHS Markit Eurozone Manufacturing Purchasing Managers' Index (PMI) showed.
The index registered 33.4 in April, down 25% from March's reading of 44.8.
A PMI of 50 represents a breakeven point where a country is neither expanding nor contracting. Anything above is an expansion, anything below signals a contraction.
Chris Williamson, chief business economist at IHS Markit said: "Euro area manufacturing output plunged to an extent greatly exceeding any decline previously seen in the near 23-year history of the PMI survey in April, reflecting a combination of factors including widespread factory closures, slumping demand and supply shortages, all linked to the COVID-19 outbreak. "
"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."
Several countries, like Spain, Iran, Italy, Denmark, Israel, and Germany, that have previously imposed restrictions are beginning to lift lockdown measures, although they've had varying levels of success in tackling their respective outbreaks.
Markit's dreadful PMIs for April, the first month of the second quarter, follows news last week that the eurozone economy contracted 3.8% in the first quarter of 2020.
A spate of countries in Asia also experienced huge falls in activity, according to PMIs released Monday.
The manufacturing PMI index for South Korea fell from 44.2 in March to 41.6 in April.
Joe Hayes, economist at IHS Markit, said: "South Korea's export-driven economy suffered immensely during April. We're seeing manufacturing production falling at the strongest rate since the global financial crisis."
"Although China, South Korea's biggest export market, appears to be slowly re-opening for business, it's clear this will be far from sufficient to offset the severe weakness elsewhere. It's certainly going to be a challenge for South Korean policymakers to prop up an economy that's so reliant on global trade."
South Korea reported Friday that exports tanked 24% in April.
A huge contraction was also seen in Taiwan's manufacturing PMI, which fell from 50.2 to 42.2 in April, and was the fastest deceleration for the country since the 2009 crisis.
Annabel Fiddes, associate director at IHS Markit, said: "The COVID-19 pandemic led to a substantial deterioration in the health of Taiwan's manufacturing sector in April. Output and new orders both fell at the quickest rates since the depths of the global financial crisis in January 2009, with many firms noting that lockdowns across key export markets in Europe and the US had weighed heavily on performance.
China's Caixin manufacturing PMI fell more than expected to 49.4 last week. This was below analysts expectations, who had predicted the country's Caixin PMI
Other countries in Asia suffered much steeper PMI figures. India's PMI plunged more than 47% to 27.4 in April.