Latest data released by Markit/BME - 23 April 2020
- Prior 45.4
- Services PMI 15.9 vs 28.0 expected
- Prior 31.7
- Composite PMI 17.1 vs 28.5 expected
- Prior 35.0
Even as the German economy relies more on industrial/manufacturing, the drop in services sector sentiment cannot be understated. That is just ugly, same goes for the composite print as German business activity plunged to a record low.
The services print is also a series low with the manufacturing print touching a 133-month low.
It is pretty much a collapse in sentiment across the board. But again, what is important to take note is that this comes during the peak of the lockdown measures in Germany as the survey period is during 7 April to 22 April.
Markit notes that:
"April's PMI surveys reveal the full effects of the COVID-19 pandemic and subsequent lockdown on Germany's economy, showing business activity across manufacturing and services falling at a rate unlike anything that has come before. Compared to a low of 36.3 during the financial crisis, the headline PMI's reading of 17.1 paints a shocking picture of the pandemic's impact on businesses."Service providers bore the initial brunt of the virus containment measures, but the collapse in demand and supply constraints have caught up with manufacturers, who are now also recording an unpreceded drop in output."The short-term work scheme is having the desired effect of curbing job losses, with employment falling much less than output during April. Still, redundancies and contract cancellations have led to a record drop in workforce numbers as firms look to cut costs and position themselves for a hard slog in the months ahead."