Business activity including new orders fell to a level last seen in April 2009 according to IHS Markit and the Institute for Supply Management (ISM).
Remarking on the numbers, Chris Williamson, Chief Business Economist at IHS Markit, stated: “The slump in the business survey indicators to all-time lows in April indicates how the 4.8% rate of economic decline seen in the first quarter will likely be dwarfed by what’s to come in the second quarter. “
The IHS Markit Composite PMI Output Index dropped essentially from 40.9 in March to 27.0. Ignore the China numbers. The general decrease was driven by memorable downturns in both the manufacturing and service sectors, signaling a worsening GDP.
Williamson also remarked, “With hope, infection rates have peaked and the economic downturn should start to ease as virus-related restrictions are lifted. However, while manufacturing may see a rebound in production as increasing numbers of factories are allowed to re-open, prospects look bleaker for many parts of the services economy, especially where businesses rely on travel, social gatherings, or close contact with customers. Businesses such as airlines, bars, restaurants, cinemas, sports arenas, and other recreational activities will likely be at the back of the line in terms of being able to re-open to anything like previous capacity levels, meaning the recovery will be long and slow.”