May 6, 2020 / 8:16 AM / 22 days ago

Coronavirus lockdown plunges French services into record slump - PMI

FILE PHOTO: A cyclist rides on the deserted Grands Boulevards in Paris as a lockdown is imposed to slow the rate of the coronavirus disease (COVID-19) in France, March 27, 2020. REUTERS/Charles Platiau

PARIS (Reuters) - French service providers saw an unprecedented collapse in business activity last month due to a nationwide coronavirus lockdown that force all but non-essential firms to close, a monthly survey showed on Wednesday.

Data compiler IHS Markit said its purchasing managers index for services fell in April to a record low 10.2 from 27.4 in March, slightly worse than a preliminary reading of 10.4

The freefall dragged the index further away from the 50-point threshold dividing an expansion in activity from a contraction.

With business at a standstill, new orders plunged and firms reined in headcount at an unprecedented rate with large swathes of the economy shutdown to contain the coronavirus outbreak.

IHS Markit’s overall PMI index, which includes services and already published data from the manufacturing sector, fell to 11.1 from 28.9 in March, marginally worse than the 11.2 originally reported.

The lockdown, in place since mid-March, is due to be lifted from next Monday, but some restrictions will remain in place, leaving little prospect for a quick recovery for most firms.

“Any return to long-term growth rates might be gradual, with consumers taking time to overcome hesitancy surrounding public health before they resume their previous spending habits,” IHS Markit economist Eliot Kerr said.

Reporting by Leigh Thomas; Editing by Catherine Evans

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