Factories fell quiet across most of Europe and Asia in March as the coronavirus pandemic paralyzed economic activity, with evidence mounting that the world is sliding into deep recession.

Manufacturing activity has tumbled, purchasing managers’ index (PMI) surveys showed on Wednesday, with sharp slowdowns in export powerhouses like Germany and Japan overshadowing a modest improvement in China.

The virus pandemic has infected more than 877,400 people around the globe and forced factories, shops and schools to close amid government-imposed lockdowns. This has upended supply chains and crushed demand for goods as consumers worried about job prospects rein in their spending and stay indoors.

In the eurozone, IHS Markit’s final March manufacturing PMI sank to lowest since mid-2012, when the currency union’s debt crisis was raging and was well below the mark separating growth from contraction.

Data from the United States, which was expected later on Wednesday, was also projected to show a sharp decline in factory activity there too as authorities enforce strict lockdown measures to control the spread of the virus.

U.S. consumer confidence has dropped to a near three-year low as the pandemic shakes people’s lives, with a record number of Americans filing for unemployment benefits.

The output from Britain’s factories shrank at the fastest pace since the debt crisis as the spread of coronavirus led to a spiraling of delays and hammered business confidence.

"With consumers clamping down on all discretionary spending in the current uncertain environment, the manufacturing sector inevitably will struggle further," said Samuel Tombs at Pantheon Macroeconomics.

Turkey’s PMI was at 48.1 this March, down from 52.4 in February, posting below the 50 no-change mark for the first time in three months, with the outbreak named as the main culprit.

According to the Istanbul Chamber of Industry (İSO) PMI Manufacturing Index report prepared in cooperation with IHS Markit, output and new orders both softened, while firms scaled back purchasing activity.

"On a positive note, employment continued to increase," the report said. Difficulties in the sector were overwhelmingly attributed to the coronavirus outbreak, which resulted in moderations of both output and new orders, it said. "Production softened for the first time in five months, while the easing in new business ended a two-month sequence of expansion," it added.

The report indicated that new export orders also softened to a large extent, and more than the drop seen in total new business. "Despite slower workloads, manufacturers in Turkey continued to take on additional staff during March," it said, adding that employment rose for the third month running, in some cases due to improving new order inflows in previous months.

It also noted that stocks of purchases also fell, as did stocks of finished goods, as firms noted a general reluctance to hold inventories given current uncertainty. The delivery of purchased items was also impacted by the virus, with suppliers’ delivery times lengthening to the second-largest extent since the survey began in June 2005.

It also stated that the rate of input cost inflation remained marked during March, with currency weakness the main factor behind the latest increase in input prices. The report said some supply shortages were also behind the rise in cost burdens.

"As a result of a marked increase in input costs, manufacturers raised their output prices," it stressed, adding that the rate of charge inflation was sharp and the steepest in just under a year-and-a-half.

From expensive watches to chocolates and cement, the Swiss industry is also being battered by the epidemic, with the country's PMI survey sinking to its lowest level in more than a decade.

The Swiss PMI for March fell to 43.7 points, its lowest since July 2009, and is likely to drop further, the authors said. A measure of below 50 points indicates a shrinking manufacturing sector, which represents around 19% of the country's economic output.

Global fund managers polled by Reuters are convinced the world economy is already in recession, similar to economists’ assessments in another Reuters poll.

As the prospect of a deep recession grows, traders on Wednesday made a fresh dart for the safety of government bonds, the dollar and gold.

China healing?

Chinese factory activity improved slightly more than expected after plunging a month earlier, its PMI showed, but growth was marginal, highlighting the intense pressure facing businesses as domestic and export demand slumps.

While factories in China gradually restarted operations after lengthy shutdowns and a fall in virus cases allowed the country to start relaxing travel restrictions, activity in South Korea shrank at its fastest pace in 11 years as many of its trading partners imposed dramatic measures to curb the virus’ spread.

"If you look at the Korean numbers, they’re fairly bad... They’re likely to get worse still because Korea will be dependent on parts from Europe and the United States," said Rob Carnell, Asia-Pacific chief economist at ING in Singapore.

"(Policymakers) have to accept the inevitable that there is a massive global pandemic here, there is an outbreak in almost every country globally and certainly in our region, which is getting to levels that if they don’t take very dramatic action, it’s going to get much worse," he said.

Japan’s factory activity contracted at the fastest pace in about a decade in March, adding to views that the world’s third-largest economy is likely already in recession.

A separate "tankan" survey by the Bank of Japan showed business sentiment soured to a seven-year low in the three months to March, as the outbreak hit sectors from hotels to carmakers.

"The tankan clearly shows a sharp deterioration in business sentiment and confirms the economy is already in recession," said Yasunari Ueno, chief market economist at Mizuho Securities.

China’s Caixin/Markit PMI rose to 50.1 last month from February’s record low of 40.3 and just a notch above the break-even mark, while South Korea’s IHS Markit PMI plunged to its lowest since January 2009 when the economy was reeling from the global financial crisis.

In Japan, where the PMI fell to its lowest since April 2009, the ruling coalition has called on the government to secure a stimulus package worth at least 60 trillion yen ($553 billion).

"Things are likely to get a lot worse in the months ahead," Alex Holmes at Capital Economics said in a note to clients, noting the survey period for the PMIs likely didn’t capture more recent lockdowns such as those in Malaysia and Thailand.

The consultancy expects global gross domestic product (GDP) to fall by more than 3% this year.

Policymakers across the globe have announced massive monetary and fiscal stimulus measures to try to mitigate the economic fallout from the pandemic, keep cash-starved businesses afloat and save jobs.

But many measures have been short-gap steps to deal with the immediate damage to corporate funding and shore up banking systems amid worries of a credit crisis.

The International Monetary Fund has said the pandemic was already driving the global economy into recession, calling on countries to respond with "very massive" spending to avoid bankruptcies and emerging market debt defaults.