Washington: Global manufacturing contracted in February by the most since 2009 as the coronavirus severely disrupted demand, trade and supply chains.
The JPMorgan Global Manufacturing PMI fell 3.2 points to 47.2, snapping a three-month streak of expansionary readings, according to a report released Monday. Production plunged the most in almost two decades while the measure of new export orders also fell to the lowest since 2009.
Global manufacturing shrank in February by most since 2009
The report adds to signs that the global economy faces its biggest test since the financial crisis just as concerns about trade tensions had begun to ease. The Paris-based OECD warned Monday that economic growth will sink to decade lows as the coronavirus outbreak hammers demand and supply.
Factory employment declined for a third straight month, with the rate of job losses the fastest since 2009. Output contracted in 15 of 31 economies, including China, Japan, Germany, France, Italy, Taiwan, South Korea and Australia. The U.S., U.K., Canada, Mexico, India and Brazil saw output growth.
The figures reflect record weakness in Chinese manufacturing data, amid factory shutdowns from China to South Korea and growing fears that the outbreak will turn into a global pandemic. Bank of America Corp. economists warned clients on Thursday that they now expect 2.8% global growth this year, the weakest since 2009.
IMF Managing Director Kristalina Georgieva and World Bank President David Malpass pledged Monday to use “available instruments to the fullest extent possible, including emergency financing, policy advice, and technical assistance.”
The IMF has said the virus would likely knock 0.1 percentage point from its 2020 global growth estimate of 3.3%, adding that it was also studying more “dire” scenarios. IMF Chief Economist Gita Gopinath warned last week of “much graver costs” should the virus move to countries with insufficient health-care systems.
Nigeria, Brazil and Mexico confirmed their first cases last week while Australia, the Netherlands and Britain all reported new infections. The World Health Organization on Friday raised its global risk assessment to “very high” from “high” as some countries struggle to contain the virus.