The IHS Markit Purchasing Managers Index, which measures both the service industry and manufacturing, fell at 13.5 in April, according to preliminary data. In March, the same index had already registered its largest monthly decline at 29.7. A contraction in the number of PMIs – a figure below 50 – indicates a likely decline in overall economic growth.
“The month of April saw unprecedented damage to the euro area economy against a backdrop of virus foreclosures associated with declining global demand and shortages of personnel and inputs,” said said Chris Williamson, chief economist at IHS Markit, in a statement.
Williamson added that activity in the second quarter of this year could “record the most severe downturn in the region, as we have seen in recent history”.
Eurozone countries have been among the hardest hit by the virus, with Italy, Spain, France and Germany among the top five countries in the world with the highest number of infections.
Most European governments have introduced locking measures to contain the spread of the virus. As a result, their savings were halted, restaurants, shops, cinemas and other services closed to the public.
The International Monetary Fund (IMF) forecasts a 7.5% contraction for the euro area in 2020.
Earlier in the session, Germany’s flash index was 17.1, a record high, down from 35.0 the previous month. It was worse than analysts expected with Phil Smith, senior economist at IHS Markit, who said it “paints a shocking picture of the impact of the pandemic on business.”