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Euro zone business activity collapsed last month as attempts to contain the coronavirus pandemic pushed governments to shut down vast swathes of their economies, from shops to factories to restaurants, a survey showed today. 

The pandemic has infected more than a million people worldwide, paralysing economies as consumers worried about their health and job security stay indoors and rein in spending. 

IHS Markit’s final Composite Purchasing Managers’ Index plummeted to a record low of 29.7 in March from February’s 51.6.

This was lower than the flash reading of 31.4 and marking by far its biggest one-month drop since the survey began in July 1998. The 50 mark separates growth from contraction. 

“The data indicate that the euro zone economy is already contracting at an annualised rate approaching 10%, with worse inevitably to come in the near future,” said Chris Williamson, chief business economist at IHS Markit. 

That was borne out by the survey as demand fell at the fastest rate on record. The new business index sank to 27.7 from 51.2, much weaker than the flash reading of 29.5. 

Like their manufacturing counterparts, activity in the bloc’s dominant service industry also almost ground to a halt. 

Its PMI dropped to a survey-low of 26.4 from February’s 52.6, below the preliminary estimate of 28.4. 

“The service sector is currently seeing an especially severe impact from the COVID-19 outbreak, with travel, tourism, restaurants and other leisure activities all hit hard by virus containment measures,” Williamson said. 

With the lockdowns likely to last for some time, optimism has all but dried up. 

The services business expectations index almost halved to a survey low of 33.5 from 61.3, more than eight points below its previous record low set in November 2008, just as the euro zone debt crisis was taking shape.

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