Coronavirus: German manufacturing output plunges to record low since financial crisis
Germany’s export-dependent manufacturing sector took a blow in March as the coronavirus pandemic has caused factory closures and dented demand.
IHS Markit’s Purchasing Managers' Index for manufacturing in Germany, released today, dropped to 45.4 in March from 48.0 in February — below 50 marks a contraction.
The March PMI data is the biggest drop in output for the country’s heavyweight manufacturing sector since the financial crisis in 2009.
"There's scope for the numbers to get even worse before they get better, as most containment measures and factory shutdowns happened either during or after the survey data was collected [between 12-24 March]," said Phil Smith, principal economist at IHS Markit.
Read more: One in four German companies expects to put staff on short hours
Like most EU countries, Germany has been on near-total lockdown for the past two weeks. Its car industry is in crisis after closing European plants and putting hundreds of thousands of workers on reduced-hour contracts. It is not clear how long the plant shutdowns will continue, but some German carmakers are mulling state loans to help mitigate the impact of the pandemic.
Germany’s Council of Economic Experts warned this week that it was “inevitable” that Europe’s largest economy would fall into recession during the first half of this year. It predicted a worst-case scenario of a 5.4% drop in GDP and at best a 2.8% fall, depending on how long the shutdown of businesses due to coronavirus lasts, and how quickly the economy recovers.