Germany's private sector logged its biggest contraction since 2009, flash survey data from IHS Markit showed Tuesday.
The composite output index plunged to 37.2 in March from 50.7 in February. This was the lowest score since February 2009 and also below economists' forecast of 40.6.
The sharp drop in activity was driven by the service sector, where businesses highlighted the impact of efforts to contain the spread of the coronavirus disease 2019, or covid-19.
The services Purchasing Managers' Index fell to a record-low 34.5 from 52.5 a month ago. The expected reading was 42.3.
There was a deepening downturn in the manufacturing sector as production decreased at the joint-fastest pace since early 2009. The manufacturing PMI came in at 45.7 in March, down from 48.0 in February and forecast of 39.6.
The March data are indicative of GDP falling at a quarterly rate of around 2 percent, and the escalation of measures to contain the virus outbreak mean that the economy would be braced for the downturn to further intensify in the second quarter, Phil Smith, principal economist at IHS Markit said.