Eurozone corporate activity collapses with Corona virus spread
The pandemic affected more than a million people worldwide, paralyzing economies, as consumers remain concerned about their health and job security in their homes and curb spending.
The final reading of the IMS Market Composite PMI fell to a record low of 29.7 in March from 51.6 in February, which is less than the initial reading of 31.4, and represents by a large margin the largest monthly drop since the survey began in July July 1998. The 50th level separates growth and contraction.
“The data indicates that the eurozone economy is already shrinking at an annual pace of close to 10%, with an even worse situation coming in the near future inevitably,” said Chris Williamson, chief economist at IHS Market.
This was confirmed by the survey, as the request went down at the fastest pace ever. The index of new business fell to 27.7 from 51.2, which is lower than the initial reading of 29.5.
As was the case with the corresponding companies in the manufacturing sector, activity in the services sector that dominated the conglomerate almost stopped. The PMI fell to the lowest level in the survey history at 26.4 from February’s level of 52.6, and fell from the initial reading of 28.4.
With the general isolation measures likely to continue for some time, optimism dissipated.
The index of business expectations for the services sector fell by almost half, to reach its lowest level since the start of the survey at 33.5 from 61.3, as it fell more than eight points from the record low level recorded in November 2008, when the euro zone debt crisis was beginning to take shape.
In the same context, euro zone retail sales jumped more than expected in February, the month prior to the spread of Coronavirus measures across the European continent, as shoppers stockpiled food and drinks and increased their spending online.
The European Union’s statistics office, Eurostat, said retail sales in the 19-nation euro zone rose 0.9% compared to January and 3% year-on-year.
Economists expected a monthly increase of 0.1% and a rise of 1.7% on an annual basis.
Food, beverage and tobacco sales increased by the most for the month by 2.4%, and mail and online sales orders increased 5.6%.
Non-food goods sales increased by a modest 0.2%, as sales of computer equipment and books decreased. Auto fuel sales also fell.
At the level of the largest economies, retail sales rose 1.2% in Germany, increased 1.1% in France, but data were not available for Italy, the first European country to experience the Corona virus crisis and the most affected.
The number of people infected with the emerging coronavirus in the world has exceeded one million, while the spread of the epidemic is greatly accelerating in the United States, where 1169 deaths were recorded during the past 24 hours, an increase of one third from the previous daily toll.
The epidemic has caused enormous economic damage, as shown by a figure that reflects the situation. Within one week, 6.6 million Americans lost their jobs, while half of humanity’s activity was suspended due to segregation measures that are sometimes strictly enforced.
The number of confirmed HIV infections exceeded one million Friday, and the number of deaths was 52,000, according to an AFP count.
Europe is the hardest hit continent, but the United States is well on its way to becoming the new epicenter, with a quarter of the world’s infections. These numbers are probably lower than reality due to a lack of detection capabilities.