May 6, 2020 / 7:32 AM / 23 days ago

Spanish services activity plunges deeper than March record low on coronavirus - PMI

MADRID (Reuters) - Spain’s strict lockdown to curb the novel coronavirus epidemic, which including closing all bars and restaurants, caused services sector activity to plunge even deeper in April than the record low hit in March, a survey showed on Wednesday.

Markit’s Purchasing Managers’ Index (PMI) of activity among services companies, which account for around half of Spain’s economic output, sank to a record low 7.1 in April, down from 23.0 in March and 52.1 in February.

The sector had been above the 50 line denoting growth for more than six years before the lockdown.

“Based on March and April data alone, the pandemic is already close to surpassing the net effect on GDP seen during the global financial crisis and the difficult years that followed,” said Paul Smith, Economics Director at IHS Markit.

A related survey on Monday showed Spanish manufacturing activity shrank to its lowest level in 12 years in April.

“Whilst startling enough, this figure may well prove to be conservative, with the depth of the downturn undoubtedly greater than anything we have ever seen before,” Smith said.

The euro zone’s fourth-largest economy has been under one of the world’s strictest lockdowns since March 14 to limit the spread of the virus. Authorities have now started easing restrictions, including reopening some businesses such as hairdressers and hardware stores.

(This story has been refiled to fix headline)

Reporting by Inti Landauro; Editing by Catherine Evans

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