The sound you hear is that of economic predictions being shredded as new figures out of China suggest the impact of the coronavirus is more savage than that of the GFC.

Finally, perhaps, the government will realise that the Reserve Bank alone is unable to stimulate the economy.

Want to scare the world’s economy? Well, a good way to do that is to release purchasing managers index figures (PMI) from China that show the biggest plunge ever in the intentions of both its manufacturing and non-manufacturing sectors.

In January the official Chinese manufacturing PMI was 50 – a neutral position suggesting no increase. That was actually slightly better than had been the case for most of last year. And then over the weekend the index for February was released, revealing an absolute collapse in the purchasing intentions of the sector – down to a record low of 35.7:

The fall was below the previous record that occurred during the GFC. And the non-manufacturing PMI – which mostly covers the purchasing intentions of those in the services and construction sectors – also fell off a cliff.

And down as well went the share market:

Last month the news was about record highs; now, in the space of a week, nearly nine months’ worth of value has been wiped away.

Last week the market was quite sure the Reserve Bank would not cut the cash rate from 0.75% to 0.5% on Tuesday; now there is an outside chance of a double cut to 0.25%.

That would be a stunning move.

The last time the Reserve Bank cut by more than 25 basis points was in February 2009 when it cut the rate from 4.25% to 3.25% in response to the ongoing GFC.

For the RBA to cut to 0.25% in one go – a rate below which the governor of the Reserve Bank, Philip Lowe, admitted was effectively zero – would mean not only uncharted territory but also a real sense that action needs to come quickly, and that the government is unlikely to provide enough fiscal stimulus in time.

Back during the GFC the advice from Treasury, having studied what happened in the 1990s recessions, was “go hard, go early, go households”. But the management of the Treasury and PM&C is rather different now, and we also have a government in place which has spent the better part of a decade criticising the ALP for its stimulus during the GFC.

Well, time moves fast, and now it is time for Josh Frydenberg and Scott Morrison to step up.

Yesterday the yields for Australian government bonds also fell – reaching record lows in the morning before recovering slightly in the afternoon off the news that the US Federal Reserve was expected to cut its target rate by 0.5% points.

Even still, the outlook is pretty grim. The five-year and two-year bond yields were both at 0.44%, a sign that traders believe there are few good signs to come.

And the reality is that, even before the coronavirus things were pretty poor.

The latest new capital expenditure figures out last week showed even though investment in the mining sector for the first time since March 2013 was above what it had been a year earlier, overall investment was down:

Most concerning is that new investment in the non-mining sector was falling.

Given the mining sector is likely to be hit mightily from China’s falling manufacturing and construction sectors, the lack of good news in the non-mining sector does not bode well.

Last week’s figures also contained the first estimate for investment in the 2020-21 financial year. Given these estimates were made well before the coronavirus, they are laughably out of date, but even here we see that the non-mining sector was projecting a slowdown:

For the first time in five years the first estimate for future investment in the non-mining sector is below that of the previous year. Given the news has only got worse in the months since these estimates were made at the end of last year, that is decidedly not good.

Yesterday we also saw the first lot of data that will feed into tomorrow’s GDP figures.

The business indictors showed a sharp fall in mining profits – down 8% in the December quarter in seasonally adjusted terms (the biggest fall for two and a half years). Even in the less erratic trend terms, mining profits were down 2.3%, and they rose a mere 0.1% in the non-mining sector (the worst result for three years):

The horror show that has been the retail sector was also on display, with income from sales down in both volume and dollars:

The sector is as bad now as it has been any time this century.

At the moment there is no good news, and much of it is very bad. But we should not lose sight of the fact that prior to the coronavirus, the economy was already in a bad state and in desperate need of stimulus. The government, however, refused to step in and instead kept talking up the need for a surplus.

Such talk is now out of date, but will this government be strong enough to respond, like the Rudd government in 2008-09, and finally provide stimulus that is fast and targeted enough to work?

• Greg Jericho writes on economics for Guardian Australia