German PMI Manufacturing dropped to 45.7 in March, down from 48.0, hitting a 2-month low. PMI Services dropped to 34.5, down from 52.5, a record low. PMI Composite dropped to 37.2, down from 50.7, a 133-month low.
Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said:
“The unprecedented collapse in the PMI underscores how Germany is headed for recession, and a steep one at that. The March data are indicative of GDP falling at a quarterly rate of around 2%, and the escalation of measures to contain the virus outbreak mean we should be braced for the downturn to further intensify in the second quarter.
“The service sector has so far borne the brunt of the government’s measures to stem the spread of COVID-19, with activity falling to the greatest extent in almost 23 years of data collection, and at a rate that already far surpasses anything seen even during the depths of the global financial crisis.
“The downturn in manufacturing has also deepened, and the situation is much worse than the headline PMI suggests. The supply-side disruption is causing the delivery times and stocks of purchases components to move in the opposite direction to what we’d usually expect during a downturn, thereby artificially boosting the PMI. The underlying data for manufacturing output and new orders are some of the worst we’ve seen over the past decade, though not as bad as the service sector.”
