FACTORY activity in China contracted at the fastest pace ever in February, even worse than during the global financial crisis, highlighting the colossal damage from the coronavirus outbreak on the world’s second-largest economy.

China’s official Purchasing Managers’ Index (PMI) fell to a record low of 35.7 in February from 50 in January, the National Bureau of Statistics (NBS) said Saturday, well below the 50-point mark that separates monthly growth from contraction.

Analysts polled expected the February PMI to come in at 46.

The sombre readings provide the first official snapshot of the Chinese economy’s state since the outbreak of the coronavirus epidemic.

The data foreshadow that the economic disruption from the virus will likely extend to the whole first quarter of 2020 since the disease outbreak has caused widespread transport curbs and required tough public health measures that have paralyzed economic activity.

“We expect year-on-year growth in all activity data to be negative in the January-February period as China’s economy has been severely constrained since Jan. 23,” said analysts at Nomura in a note after the data release, citing the extended Lunar New Year holiday and the slow resumption of businesses.

A sub-index of manufacturing production nosedived to 27.8 in February from January’s 51.3 while a reading of new orders plunged to 29.3, down from 51.4 a month earlier.

New export orders received by Chinese manufacturers also declined at the fastest pace in years, with the NBS warning of mounting pressure on exporters from delayed shipments and cancelled orders.

Labor conditions remained tight amid travel restrictions with a sub-reading for employment falling to 31.8 from 47.5.

Analysts are warning that the spread of the coronavirus in other countries will impact global supply chains and limit the recovery for Chinese manufacturers.

“Even if labor shortages in China start to ease, some factories may run into problems resuming normal production if outbreaks in other countries mean they have trouble sourcing intermediate goods,” Julian Evans-Pritchard, senior China economist at Capital Economics, said in a note Friday.

(SD-Agencies)