Locked-down France posts record drop in manufacturing in April: PMI

(C) Reuters. FILE PHOTO: Toyota Motor Manufacturing France resumes operations after five week closure amid the coronavirus disease (COVID-19) outbreak

PARIS (Reuters) – French manufacturing activity plunged into its deepest recession on record in April as the euro zone’s second-biggest economy contracted further during its coronavirus lockdown, a survey showed on Monday.

Data compiler IHS Markit said its final purchasing managers’ index dropped to 31.5 in April from 43.2 in March, in line with a preliminary reading.

The freefall plunged the index to its lowest level since records began in 1998, far below the 50-point line dividing expansions in activity from contractions.

France has been under lockdown orders banning non-essential activities since mid-March. The prospect of a gradual unwinding from May 11 is offering little relief to firms expecting a long slog back to work.

“Firms were severely pessimistic towards the business outlook,” IHS Markit economist Eliot Kerr said.

“Caution around a second outbreak will likely limit the speed at which normality is resumed, and we can therefore expect any recovery to be drawn out,” he added.

Executives polled by IHS Markit said they were reducing staff headcount at the fastest pace on record as new orders had all but dried up.

The economy suffered its deepest slump on records going back to 1949 in the first quarter, contracting 5.8% from the previous three months, the INSEE stats agency said on Thursday.