Preliminary data released by IHS Markit on Thursday pointed to an unprecedented decline in the U.S. business activity in April amid COVID19 pandemic.

According to the report, the Markit flash manufacturing purchasing manager's index (PMI) came in at 36.9 in April, down from 48.5 in March. That pointed to the sharpest contraction in manufacturing activity in 11 years. Economists had expected the reading to decrease to 38. A reading above 50 signals an expansion in activity, while a reading below this level signals a contraction. According to the report, the headline index reading was buoyed slightly by a further marked deterioration in suppliers' delivery times, while manufacturing production recorded the strongest contraction since the series began in May 2007, with new orders reducing at the steepest rate since the depths of the financial crisis in early-2009.

Meanwhile, the Markit flash services purchasing manager's index (PMI) tumbled to 27.0 this month, from 39.8 in the prior month. The latest reading pointed to the fastest contraction in services activity since the series began in October 2009 as the coronavirus-related slowdown intensified. Economists had expected the reading to drop to 31.5. According to the report, the contraction in the headline index was driven by a substantial fall in new business, which decreased the most in the series history, as demand weakened due to lockdowns and emergency public health measures to limit the spread of the virus. In addition, employment fell at the steeper pace amid lower new business.

Overall, IHS Markit Flash U.S. Composite PMI Output Index came in at 27.4 in April, down from 40.9 in March, pointing to the steepest contraction in the private sector output since the series began in late-2009.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at HIS Markit, noted: "The scale of the fall in the PMI adds to signs that the second quarter will see a historically dramatic contraction of the economy, and will add to worries about the ultimate cost of the fight against the pandemic."