COVID-19 outbreak threatens production in coming months by causing delays in shipments, says chief business economist
The Purchasing Managers’ Index (PMI) in the eurozone manufacturing sector increased in February on a monthly basis, a London-based global data company said on Tuesday.
The index went up to 49.2 in February, hitting one-year-high, from 47.9 the previous month, IHS Markit reported.
“Operating conditions in the eurozone’s manufacturing sector continued to worsen during February, but only marginally and at the weakest rate for the past year,” said the company.
In January, two market groups investment and intermediate goods saw a deterioration in operating conditions, while consumer goods saw a modest growth.
“France saw its PMI sink to a seven-month low whilst there was also a further worsening of operating conditions in Italy,” IHS Markit’s report said.
It added: “The biggest manufacturing economy, Germany, also saw another deterioration in performance, despite the respective PMI reaching its highest level in over a year.”
During the last month, manufacturing production and new orders continued to be negative and contraction rates were at the deepest level for the last 15 months.
Chris Williamson, the chief business economist at IHS Markit, said: “Despite widespread reports from companies that the coronavirus outbreak disrupted supply chains and hit foreign sales, resulting in considerably longer lead times and a steepening drop in export orders.”
He underlined that the virus outbreak threatens production in the coming months by causing delays in shipments.
“Any further spreading of the COVID-19 epidemic risks driving increased risk aversion and a reduction of spending by both businesses and consumers,” he added.