Covid-19: The economic damage starts to show

IN THIS TURBULENT time, Fora is going to bring you updates every morning and evening on the most relevant issues for Irish business dealing with the outbreak of Covid-19. Here are the main points this evening, April 1 at 6:30 pm. We want to know how your business is dealing with the outbreak, drop us a line at news@fora.ie

As the Covid-19 pandemic weighs on the economy, new data is starting to show the scale of the impact. 

Our colleagues over at TheJournal.ie have the details as last night health officials  confirmed that there are a further 325 cases of Covid-19 in the Republic of Ireland. 

Economic disruption

New data has shown that factory activity in Ireland posted its sharpest ever monthly drop last month as the coronavirus pandemic disrupted supply chains and caused a collapse in demand.  

The AIB Ireland Manufacturing PMI for March showed a marked decrease to 45.1 from 51.2 in February and indicated the sharpest decline in production since 2009.

Output, new orders and exports all fell at the fastest rates since the first half of 2009, while output expectations were negative for the first time since this series began in mid-2012. 

“Further sharp falls in the PMI are likely over the next couple of months,” Oliver Mangan, AIB’s chief economist, said. 

“The impact of the virus was not just seen in falling orders and output. Employment in manufacturing fell at its fastest pace since July 2009. Purchasing activity also declined at the quickest rate since September 2011. Cancelled orders and weak demand saw depleting levels of outstanding business as firms worked through backlogs,” he added. 

Ronan Murphy of Investec said this is the first economic data point that clearly shows the impact of the virus outbreak and associated containment measures.  

“While the Irish Manufacturing PMI recorded a severe drop in March, based on evidence from other Eurozone countries, a larger shock is in store for the Services sector when its PMI for March is released on Friday,” he said in a note this morning. 

Markets slump

Stock markets slumped Wednesday after President Donald Trump warned of “a very, very painful two weeks” to come for the United States, whose coronavirus death toll has overtaken that of China.

European equities fell hard, with London, Frankfurt and Paris all down around 4%. Wall Street opened sharply lower, but clawed back some of the losses as the morning wore on. Ireland’s Iseq index was down by around 3%. 

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Note: This piece will be updated with additional information during the day. With reporting from AFP