Plunged Global Factory Output: Wall Street Journal

Investors and policymakers regard the Manufacturing Purchasing Managers Index, or PMI, as a leading indicator of economic activities. PMI above 50.0 implies a rise in activities, offering an optimistic forecast while a reading below that shows economic decline. With the wide spread of COVID-19 around the world and more countries joining the lockdown, PMI witnessed a sharp drop in April. In India, the largest lockdown reduced PMI from 51.8 to 27.4, one of the swiftest reversals from growth to contraction recorded globally. In South Korea, which controlled the spread, the manufacturing sector also contracted owing to reduced demand abroad and difficulties of shipping goods to other countries. The only exception is China, which closed its economy first in February and swiftly contained the coronavirus. In Asia, reduced factory activities pushed the employers to lay off workers at a record pace. However, in Europe, to decrease the unemployment rate, governments cover the wages for furloughed workers as long as companies keep those employees on their books. – YaleGlobal