Norway's March PMI plunges to 11-year low as virus, oil crash bite

Reuters
·2 min read

* March PMI falls to 41.9 points from 51.6 in Feb * Reading is weakest since financial crisis of 2009 OSLO, April 1 (Reuters) - The outlook for Norway's manufacturing sector has fallen to an 11-year low amid the coronavirus outbreak and a sharp drop in the price of crude oil, the country's most important export, a key business survey showed on Wednesday. The DNB Purchasing Managers' Index fell to 41.9 points in March, the weakest since May of 2009, from a revised 51.6 points in February, logistics association NIMA and brokers DNB Markets said. PMI readings below 50 points indicate a contraction in the manufacturing sector of the economy. "The fall was driven by big drops in the index values for production, order intake and employment, which are all nearing record lows," NIMA and DNB wrote. The Norwegian mainland economy could shrink by 4% this year, the government has said, while some economists predicted a contraction of up to 10% as oil firms cut investment and many businesses face lockdowns amid efforts to curb the virus. Many firms reported supply chain disruptions, the PMI survey showed, and a surge in the price of imports as the Norwegian crown currency weakened to record lows against the euro. The government has launched business loans, tax deferment and fiscal spending worth 360 billion crowns ($34.5 billion)to alleviate the impact, while the central bank twice slashed its benchmark interest rate, from 1.5% to a record low 0.25%. Still, unemployment has risen almost fivefold in less than a month to 10.9%, the highest level since the 1930s Great Depression, and is expected to show a further jump when final March data is presented later this week. The DNB PMI index numbers for Norway were: March Revised Feb Feb PMI 41.9 51.6 52.2 Order intake 34.0 52.8 53.5 Production 36.0 47.4 48.7 Employment 33.3 50.3 51.4 Suppliers' delivery time 73.9 57.7 56.7 Inventory 50.3 47.8 47.8 ($1 = 10.4408 Norwegian crowns) (Reporting by Terje Solsvik, editing by Victoria Klesty)