Hong Kong (CNN Business) The novel coronavirus outbreak has been brutal for China and could plunge the country's economy into its first contraction since the 1970s.

Economic activity sharply declined across the board in February as companies struggled to reopen for business or hire workers during a government-mandated shutdown, according to official and private surveys released in recent days.

Wednesday revealed shockingly bad news for services in the world's second biggest economy. Chinese media group Caixin said its purchasing managers index for the sector plummeted to 26.5 last month from a reading of 51.8 the month before — the lowest figure recorded by the survey since it began in 2005. A reading below 50 indicates contraction, rather than growth.

"China's economy is in a very bad way indeed," said Kit Juckes, a strategist at Societe Generale.

That data — which mostly follows small and medium-sized companies — largely tracked with a government survey of primarily state-owned firms in the services sector released over the weekend. China's factories also recorded their worst month on record in February, according to government and Caixin data, as companies face extended closures to contain the virus, or struggled to fill jobs because of travel restrictions.

Read More