Monthly Survey of Services

Services sector remains stable in December, closes year with drop of 7.8%

Section: Economic Statistics | Umberlândia Cabral

February 11, 2021 09h00 AM | Last Updated: February 12, 2021 10h48 AM

The drop in the revenue of restaurants, hotels and catering pressed the sector of services rendered to families - Photo:   Helena Pontes/IBGE News Agency

The services sector remained  stable (-0.2%) in December against November, interrupting six consecutive months of rises. Despite the cumulative gain of 18.9% in this period, volume of services is still 3.8% below the level of February, when the social distancing measures to control the Covid-19 pandemic had not been adopted.

As a result, the sector closed the year with a cumulative index of -7.8% between January and December. This is the most intense drop in the time series of the Monthly Survey of Services - PMS, started in 2012 for this indicator. The data were released today (11) by the IBGE.

The retraction in the cumulative rate in the year surpasses that of 2016 (-5%) and interrupts two years of non-negative figures: 2018 (0.0%) and 2019 (1.0%). The sectors that mostly impacted this drop are those associated with face-to-face activities and, therefore, they were more affected by the measures adopted to fight the pandemic caused by the novel coronavirus. Among them, services rendered to families (-35.6%), professional, administrative and complementary services (-11.4%) and transportation (-7.7%) registered record drops in the period.


"In terms of activities, negative rates abounded, with four out of five sectors retreating over 2019. The major impact came from services rendered to families, which was pressed by the drop in the revenue of restaurants, hotels, catering services and production and promotion of sports events and education activities associated with vocational, technical and driving school courses, for example," explains Rodrigo Lobo, manager of the survey.

The second biggest impact came from the sector of professional, administrative and complementary services, which was pressed by the retraction in the revenue of the enterprises of management of intangible assets, administration of rewards programs, solutions of electronic payment and cleaning services.

"Concerning the administration of rewards programs, we have a correlation with the drop in the revenue of airline companies. The drop in cleaning services is because commercial buildings have been closed since March. Albeit some commercial buildings are working again, many persons remain working remotely and it affected, in some way, the hiring of companies that provide such services," states Lobo.

The retraction in the sector of transportation was mainly leveraged by the drop in the revenue of the companies in charge of air transportation of passengers, road transportation of passengers, road transportation of cargo and national mailing.

Information and communication services (-1.6%) also dropped, losing revenue especially in the segments of telecommunications, programmers and activities related to pay TV, activities of cinema exhibition, operators of satellite TV and consulting in information technology.

The only sector that recorded positive figures in the cumulative index in the year was that of other services (6.7%), mainly leveraged by the increase in the revenue of the enterprises in the segments of brokerage firms and administration of stock markets and organized counter markets.

"With the recent drop in the interest rates, families and enterprises began to look for other forms of investments rather than savings accounts and they are moving to fixed and variable rent investments. And enterprises in these support financial segments also increased their revenue, due to the intermediation in the financial market with families and enterprises that look for increasing their earnings," says the researcher.

Two activities drop in December

The change of -0.2% in volume of services between November and December was followed by two out of five activities surveyed in the PMS: services rendered to families (-3.6%) and transportation, support activities for transportation and mailing (-0.7%).

"Between June and November, the services sector posted an important recovery (18.9%), after significantly dropping in the initial months of the pandemic, between March and May. It did not reach the pre-pandemic level and now in December it interrupts a sequence of positive rates and shows a slight negative change, a kind of adaptation to the recent growth," says Lobo.


He explains that the activities that pressed the drop of the two sectors are of face to face nature, like housing and food in the sector of services rendered to families and road transportation of passengers in the sector of transportation.

"The need of social distancing, the closure of a number of establishments – either partial or complete – considered non-essential, the fear of infection by families, the nonexistence of a medication that fights Covid-19 and the still far mass vaccination are factors that limit an accelerated recovery of the sector, mainly those of face-to-face nature," highlights him.

On the other hand, the sectors of other services (3.0%), information and communication services (0.3%) and professional, administrative and complementary services (0.1%) registered positive rates between November and December.

Compared with December 2019, volume of services retreated 3.3% and recorded the tenth negative rate in a row. Also in this indicator, services rendered to families (-25.4%) were the major negative influence. It was due to the drop in the revenue of enterprises in the sectors of restaurants, hotels, catering and fitness activities, like fitness centers.

Index of tourism activities remains stable

The index of tourism activities remained stable (0.0%) between November and December, after posting seven consecutive positive rates, a period in which it accrued a gain of 120.8%. Even with the cumulative growth in the period, the segment of tourism still needs to advance 42.9% to resume the level of February.

"All those face-to-face activities, like air transportation of passengers, restaurants, hotels, car rental and travel agencies, pressed the indicator downward, making it stable this month," explains the survey manager.

In the cumulative index in the year, the indicator retreated 36.7% over the same period last year, pressed, above all, by the sectors of restaurants, air transportation, hotels, road transportation of passengers, catering and other services of cooked food, and travel agencies.