Eurozone manufacturing economy contracts sharply in March - IHS Markit

According to the report from IHS Markit, the global coronavirus disease (COVID-19) led to a notable deterioration in euro area manufacturing sector operating conditions during March. Output, new orders and purchasing all fell sharply, whilst jobs were cut markedly, and supply-side constraints intensified at a record pace. Confidence about the future sank to a historical low.

After accounting for seasonal factors, the IHS Markit Eurozone Manufacturing PMI registered below the 50.0 no-change mark for a fourteenth successive month and fell considerably from February's one year high of 49.2 to 44.5 in March. That was below the earlier flash reading and the lowest reading for 92 months. Latest data indicated that all market groups registered a deterioration in operating conditions compared to the previous month, led by the investment goods category.

All country level PMIs were lower compared to the previous month. Italy saw the sharpest deterioration in operating conditions, with the respective PMI the lowest in nearly 11 years. Having consistently recorded the best growth in recent months, Greece was the second worst performer during March. Elsewhere, France, Ireland and Spain all saw multiyear low readings for their PMIs. Only the Netherlands recorded a PMI above the 50.0 no change level in March, though growth here was marginal.

At the aggregate level, the deterioration in manufacturing output was the greatest since April 2009. Output fell sharply in line with a similar fall in manufacturing new orders, which also deteriorated to a degree unsurpassed for just under 11 years. Export trade fell sharply and at the sharpest rate since March 2009. Latest data marked an eighteenth successive month in which export sales have fallen.