Czech Republic: Manufacturing PMI slides to 11-year low amid Covid-19 impact
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, dipped from 41.3 in March to 35.1 in April, the lowest reading since March 2009. Thus, the index fell further below the critical 50-mark separating deterioration from improvement in the health of the manufacturing sector, where it has been for over a year.
April’s downturn was driven by yet another steep decline in production and new orders—with both falling at the sharpest rate since data collection began in mid-2001—as client demand was battered by the outbreak of the novel coronavirus, which led to lockdown measures to contain its spread and factory closures. Moreover, manufacturers shed jobs at a pace not seen since the 2009 financial crisis. On the price front, goods producers lowered the selling prices in efforts to remain competitive, despite rising input cost inflation due to shortages and supply delays. Lastly, business confidence plunged to a new record low in April, driven by increased worries over the length of the lockdown and recovery prospects.