Activity in factories across the world in April was shattered by the coronavirus outbreak with the future looking bleak as government lockdowns to contain the virus remain in place, freezing production and slashing demand.
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Covid-19 has seen more than 3.5 million people infected around the world, and almost 250,000 deaths. Lockdowns are still in place in numerous countries and the global economy is looking likely to suffer its steepest contraction since records began this year with supply chains being hugely disrupted.
In a bid to soften the economic blow, governments and central banks have let loose an unprecedented level of fiscal and monetary aid.
A series of Purchasing Managers' Indexes (PMIs) from IHS Markit across Europe and Asia further contracted in April with many falling to record lows and others falling to levels not seen since the 2008-09 global financial crisis.
Today saw IHS Markit's final manufacturing PMI for the eurozone sink to 33.4 - the lowest since it began in 1997 and far below the 50-point dividing growth from contraction.
With shops still closed, consumers worried about their health and employment prospects, demand in the bloc fell to its lowest ever, offering little hope for an imminent turnaround.
Erik Nielsen, chief economist at UniCredit, said: “This past week saw the amazing coincidence of the publication of the deepest quarterly economic decline in the Western world in almost 100 years and the conclusion to the strongest monthly equity rally in more than 30 years.”
However, stock markets in Europe, as well as oil prices, have fallen further following a spat between the US and China over the origin of the coronavirus, adding fuel to the fears of a renewed trade war that would delay a fast rebound.
PMIs in Asia have also tumbled. In South Korea - Asia's fourth largest economy and a major force in global manufacturing - last month's PMI plummeted to its lowest since early 2009. Japan saw a similar fall to an 11-year low.
“Regional PMI manufacturing data kicked off the data dump on Monday, with economies registering deep contractions with most countries employing some form of lockdown,” said Prakash Sakpal, Asia Economist at ING.
“Economic data should remind investors of the bleak economic situation ahead even as governments from previous hotspots ready the gradual reopening of their economies.”
China's official PMI showed factory activity grow in April, though more slowly than in March. While the East Asian powerhouse does appear to be ahead of others in reemerging from the economic slump the pandemic has caused, recovery is likely to be slow and gradual and unlikely to kickstart any global resurgence.
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