Eurozone April PMI Hits Record Low... Business Activity Nearly Halted

Published 06 May.2020 19:15(KST)

Lower Level Than During the 2009 Global Financial Crisis

[Image source=AP Yonhap News]

[Asia Economy Reporter Jin-gyu Lee] Last month, business activity in the Eurozone, which refers to the 19 member countries of the European Union (EU) that use the euro, nearly came to a halt due to the spread of the novel coronavirus disease (COVID-19).

According to market research firm IHS Markit on the 6th, the Eurozone's composite Purchasing Managers' Index (PMI) for April fell further to 13.6 from 29.7 in March, which was the lowest level ever recorded. This is the lowest level since IHS Markit began PMI surveys in 1998 and is even lower than during the 2009 global financial crisis.

In particular, the service sector was found to have almost stopped. The service PMI dropped to a record low of 12.0 in April from 26.4 in March.

The PMI is compiled monthly through surveys of purchasing managers in companies regarding new orders, production, inventory, employment, and other factors. It is an indicator used to gauge companies' perceptions and outlooks on economic conditions and business trends in manufacturing and service industries. A figure above 50 means that more companies responded positively than negatively, while a figure below 50 indicates the opposite.

This result came as governments across Europe implemented various measures to restrict business activities to prevent the spread of COVID-19. Previously, major European countries such as Germany, France, Italy, and Spain imposed high-intensity lockdown measures, including restricting citizens' movement and closing various stores, in response to the spread of COVID-19.