The coronavirus’ impact on the world’s second largest economy and the driver of growth in the lubricants industry showed a dramatic collapse across the board.
Manufacturing output slumped by 15.7% over January and February, while investment in the sector fell by a massive 31.5%, amid a widespread shutdown of manufacturing operations in the country following the novel coronavirus (COVID-19) outbreak in Wuhan, Hubei province. This was the first decline on record.
The shutdown has led analysts to downgrade their outlook for the Chinese economy, with most now expecting a historic contraction in the first quarter. According to Bloomberg, the median forecast for year-on-year growth in the first quarter is now 3.8%, the weakest in 30 years. For the full year of 2020, it’s projected at 5.4%.
As of last week, around 95% of large companies outside the epicentre of the virus in Hubei province had reopened, according to the Ministry of Industry and Information Technology, while “about 60%” of small to medium-sized firms had returned to work, the South China Morning Post reported.
While China is slowly getting back up to speed, other major economies are just starting to feel the effects of the coronavirus, as the European Union closed its borders, while the U.S. Federal Reserve reduced interest rates to near zero and the Trump administration proposed a USD1.3 trillion economic stimulus package in an attempt to halt a likely recession in the world’s largest economy.