Monthly Survey of Services

Services retreat 0.9% in May, fourth consecutive drop in this sector

Section: Economic Statistics | Umberlândia Cabral

July 10, 2020 09h00 AM | Last Updated: July 10, 2020 12h35 PM

Information and communication services were the major negative result among the sectors - Photo: Licia Rubinstein/IBGE News Agency

After the record tumble registered in April, the services sector retreated 0.9% in May, still unveiling the effects of the social distancing measures to control the Covid-19 pandemic. This is the fourth consecutive negative rate in the sector, which accrues a loss of 19.7% in the period. These are data from the Monthly Survey of Services - PMS, released today (10) by the IBGE.

Rodrigo Lobo, manager of the survey, highlights that despite being the fourth month of negative rates, the drop in February was of a short-term nature. On the other hand, the effects of social distancing began to be felt in March, whose last ten days were paralyzed. In May, volume of services is 27.9% below the all-time record in November 2014.

"This rate of -0.9% shows the further deepening of a scenario, which was already unfavorable for the services sector. To have a still negative figure when the comparison is made with April, the worst result of the time series (-11.9%), is quite significant", stresses Lobo.

 Three out of the five activities surveyed dropped compared with April, highlighted by the sectors of information and communication services (-2.5%) and of professional, administrative and complementary services (-3.6%). The sector of Other services declined 4.6% in the period. In contrast, the activities of transportation, support services to transportation and mailing (4.6%) and of services rendered to families (14.9%) recovered part of the loss recorded in the last months.

"The sectors related to housing and food and transportation were those that posted the most important losses in April. They somewhat recovered in May, but not enough to take the services sector to the positive side," explains Lobo.

The researcher highlights that the effects of the downturn caused by the closure of the non-essential establishments were felt differently in May. "Having a significant weight in the survey, the major negative highlight this month, the sector of information and communication services, shows the effects of the downturn in the economic life. They are segments that depend on an active economic dynamics. In the beginning, we felt the impact of the downturn mainly in the services rendered to families; now, the services rendered by enterprises to other enterprises begin to show significant effects," concludes Lobo.

Compared with May last year, the services sector declined 19.5%, registering the most intense negative rate since the beginning of the time series. All the five activities retracted. Transportation, support activities to transportation and mailing (-20.8%) and services rendered to families (-61.5%) were the major negative influences on the overall index. These activities were strongly impacted by the social distancing measures in Brazil. In the cumulative index over the first five months of the year, the services sector retreated 7.6%, whereas it accrued -2.7% in the last 12 months.

Index of tourism activities rises 6.6%

In May, the index of tourism activities rose 6.6% compared with April, recovering part of the cumulative drop between March and April (-68.1%). Compared with May last year, the index declined 65.6%, recording the third consecutive negative rate, mainly pressed by the dropping revenue of air transportation, restaurants, hotels, land transportation and catering services. In the cumulative index in the year, the special aggregate of tourism activities retracted 29.9%.