February readings of global and Chinese manufacturing purchasing managers’ indices showed a deep plunge in economic sentiment, the result of likely virus-induced disruptions in financial markets and supply chains. As analysts and economists continue to debate whether the coronavirus will generate a demand or supply shock – or both – manufacturing PMIs clearly show that the latter has already taken place.

More detailed global PMI breakdowns show a disconcerting picture – manufacturing delivery times and inflation are starting to surge, while declines in output and new export orders are all accelerating. Continued pessimism will lead to more vociferous calls for monetary and fiscal policy action.

Source: Thomson Reuters