US manufacturing activity plunged to an 11-year low in April as the novel coronavirus wreaked havoc on supply chains, suggesting the economy was sinking deeper into recession.
The survey from the Institute for Supply Management (ISM) on Friday added to a raft of grim data this week, including a collapse in consumer spending in March and a surge to 30.3 million in the number of Americans who have filed claims for unemployment benefits in the last six weeks. Strict measures to slow the spread of COVID-19, the respiratory illness caused by the coronavirus, have almost paralyzed the country, leading to the deepest economic contraction since the Great Recession in the first quarter.
The ISM said its index of national factory activity dropped to a reading of 41.5 last month, the lowest level since April 2009, from 49.1 in March. The monthly decline in the ISM index was the biggest since October 2008. A reading below 50 indicates contraction in the manufacturing sector, which accounts for 11% of the US economy.
A separate report from the Commerce Department on Friday showed construction spending rebounded 0.9% in March, with gains in private and public outlays, after declining 2.5% in February. The report, however, likely does not fully capture the coronavirus-related business closures and disruptions that swept through the country beginning in mid-March.
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