Italy's Services Sector Suffers Hardest Coronavirus Blow

Italy's services sector suffered an unprecedented decline in activity as the government tightened its lockdown during March in an effort to slow the spread of the coronavirus, with Spain seeing a collapse that was almost as severe.

Data firm IHS Markit Friday said its Purchasing Managers Index for Italy's services sector plummeted to 17.4 from 52.1 in February, the largest drop in a single month since the series began in 1998. It was the largest drop ever recorded by IHS Markit for any national services sector, and the lowest level ever reached by the services measure.

A reading below 50.0 points to a decline in activity, and the further the measure drops below that threshold, the greater is the decline. By comparison, a first estimate for the U.S. services PMI in March expected a drop to 39.1 from 49.4. In China, which pioneered lockdowns as a response to the disease, the PMI for the services sector fell to 26.5 in February, before rebounding to 43.0 in March as some restrictions were eased.

"March data point to an extremely challenging time for the Italian economy and, for that matter wider society, with the sheer scale of the impact on output, employment and investment likely to be felt for a long time to come," said Lewis Cooper, an economist at IHS Markit.

In Spain, which has also been hard hit by the virus and responded with restrictions on movement and social interaction, the PMI fell to 23.0 from 52.1.

Write to Paul Hannon at paul.hannon@wsj.com


  (END) Dow Jones Newswires
  04-03-20 0553ET
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