The Purchasing Managers’ Index (PMI) – a bellwether of economic health for the manufacturing and service sectors – has dropped to record lows in both the USA and eurozone during March.

According to PMI survey data, the eurozone economy suffered “an unprecedented collapse in business activity in March, as the coronavirus outbreak intensified”.

In February, the eurozone’s index stood at 51.6. This dropped to 31.4 in March – the largest monthly fall in business activity since comparable data was first collected in July 1998.

Consumer-facing industries such as travel, tourism and restaurants were hit the hardest. Manufacturing saw a less severe, though still steep, downturn in production. The survey’s gauge of factory output dropped just over nine points, down from 48.7 to 39.5, registering the largest monthly contraction of production since April 2009.

Similarly, US private sector firms indicated a marked contraction in overall business activity in March following the escalation of Covid-19 outbreak. The overall decline was the steepest recorded since comparable survey data was available in October 2009, and reflected widespread falls inactivity across the manufacturing and service sectors, said PMI.

Commenting on the flash PMI data, Chris Williamson, chief business economist at IHS Markit, said: “US companies reported the steepest downturn since 2009 in March as measures to limit the Covid-19 outbreak hit businesses across the country. The service sector has been especially badly affected, with consumer-facing industries such as restaurants, bars and hotels bearing the brunt of the social distancing measures, while travel and tourism has been decimated.

“However, manufacturing is also reporting a slump in demand, with production falling at a rate not seen since 2009, linked to either weak client demand, lost exports or supply shortages.

“Jobs are already being slashed at a pace not witnessed since the global financial crisis in 2009 as firms either close or reduce capacity amid widespread cost-cutting.

“The survey underscores how the US is likely already in a recession that will inevitably deepen further. The March PMI is roughly indicative of GDP falling at an annualised rate approaching 5 percent, but the increasing number of virus-fighting lockdowns and closures mean the second quarter will likely see a far steeper rate of decline.”