What's going on?

New survey data out on Monday suggested manufacturing activity in the eurozone last month shrank at the fastest pace since records began in 1997 � and for all the hot air it�s blowing, the States may not be doing much better.

What does this mean?

These regular surveys ask purchasing managers in the manufacturing industry how busy they�ve been each month, and they might�ve been met with a relatively optimistic response in April. Those managers, after all, seem to have spent at least some of the month working, rather than languishing in economic and social lockdown like the rest of the Western world. But Europe’s survey data, for a start, still made for glum reading: manufacturing activity was at an eleven-year low in Germany, Spain, and the Netherlands, and at the lowest level ever recorded in France and Italy.

Why should I care?

The bigger picture: You ain�t seen nothin� yet.

The majority of coronavirus disruptions might only have struck in March, but the eurozone economy still shrank at an annualized rate of 14% last quarter. And with April�s manufacturing activity even weaker than March�s, the second quarter looks set to be even worse than the first. That�s reflected in estimates from investment bank Goldman Sachs, which reckons the eurozone economy will shrink by 15% this quarter compared to the second quarter of 2019 � or at an annualized rate of almost 40% (tweet this).

Zooming out: Gosh darn it.

Data out last Friday showed America�s manufacturing industry activity fell to its own eleven-year low in April (noticing a pattern?), and while things may not be as bad as in Europe, the country�s economy is still headed for an annualized 34% drop this quarter. In an effort to limit the impact on businesses and individuals, the US government is reportedly working on a new support plan � not that the president�s planned tax cut will do much to help the 20 million newly unemployed expected to appear in April�s jobs data this Friday.