U.S. flash services PMI index falls to record low in April, manufacturing PMI index drops to 36.9

The U.S. IHS Markit flash services PMI business activity index dropped to 27 in April from March’s 39.8. This indicates towards the most rapid contraction of services activity since the series started in October 2009 as the virus-related slowdown intensified.

New business dropped at a significant rate that was the most severe in the series history. The fall in demand was linked to lockdown and emergency public health measures to restrict the spread of the virus, which hit consumer-facing industries especially hard. The global nature of the outbreak also led to a record fall in foreign client demand.

The outlook sentiment for business activity fell to a new series low, as companies grappled with uncertainty regarding how long lockdown and social distancing measures will last. Service providers also cut their staffing levels at a steeper rate in the midst of lower new business. Meanwhile, attempts to attract clients into making purchases led to the sharpest drop in output charges since data collection started.

Meanwhile, the flash manufacturing PMI index dropped to 36.9 in April from March’s 48.5. The index was buoyed a bit by a further marked fall in suppliers’ delivery time. New orders fell at the steepest rate since the depths of the financial crisis in early-2009. Several firms have underlined the cancellation or postponement of both domestic and foreign orders after the pandemic escalation.

Input costs and factory gate charges both dropped at the most rapid rates for over a decade as weaker demand conditions pushed manufacturers and suppliers to remain competitive. Sentiment about the outlook for output over the coming year fell to a fresh low, and was negative for the first time since the series started in July 2012.