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Spanish services activity hits record low on coronavirus - PMI

Outbreak of the coronavirus disease (COVID-19), in Barcelona

MADRID (Reuters) - Spain's lockdown measures to curb the spread of coronavirus led to a record contraction in services sector activity last month, with hotels and restaurants particularly badly hit, a survey showed on Friday.

Markit's Purchasing Managers' Index (PMI) of activity among services companies, which account for around half of Spain's economic output, sank to a record low 23.0 in March from 52.1 in February.

The sector had been above the 50 line denoting growth for more than six years.

"The March survey laid bare the scale of the COVID-19 pandemic and associated effort to contain the outbreak," said Paul Smith, Economics Director at IHS Markit.

A related survey on Wednesday showed Spain's manufacturers suffered their steepest decline in almost seven years in March.

"Trying to put a number on the scale and duration of the pandemic in terms of falls in GDP and employment is extremely challenging, but on balance there is a high probability that the severity of the downturn in the second quarter will exceed anything we saw during the great recession of 2008/2009," Smith said.

The euro zone's fourth-largest economy has been under lockdown since March 14 to limit the spread of the virus, with all but essential shops shut and companies temporarily laying off hundreds of thousands of workers.


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(Reporting by Jose Elías Rodríguez; Editing by Andrei Khalip and Hugh Lawson)