Business activity in Europe has fallen at the sharpest pace on record, according to a survey that started in 1998 and new statistics published on Tuesday.
The Purchasing Managers’ Index, a gauge of business executives’ outlook on the economy, fell to 31.4 points in March for the 19-country eurozone, from 51.6 in February, as governments put limits on business activity to contain the virus outbreak.
The index is at the lowest since the survey was started and is below the trough registered during the global financial crisis in 2009. The 50-point level separates economic growth from contraction.
The index, which is compiled by research firm IHS Markit, shows the biggest hit to the services sector, particular tourism and restaurants. Companies in this sector were cutting jobs at the fastest pace since 2009.
Chris Williamson, chief business economist at IHS Markit, says the survey suggests a quarterly economic contraction of 2%, or over 8% in annualized terms, though that forecast is likely to worsen.
“Business sentiment about the year ahead has plunged to the gloomiest on record, suggesting policymakers’ efforts to date have failed to brighten the darkening picture,” he said.