In June 2020, the volume of services in Brazil grew 5.0% compared to May, in the seasonally adjusted series, after four months of negative rates in a row, when it accumulated a loss of 19.5%. In the non-adjusted series, in the comparison with June 2019, the volume of services decreased 12.1% in June 2020, the fourth negative rate. Year-to-date, the volume of services fell 8.3% compared to the same period in 2019. The cumulative index in the last twelve months (-3.3%) had the most intense negative result since November 2017 (-3.4% ).

By moving 5.0% from May to June 2020, the services sector interrupted a sequence of four consecutive negative rates, a period in which it accumulated a loss of 19.5%. The negative effects of the pandemic on the services sector began to be felt only in the last 10 days of March and deepened in the following two months, causing a retraction of 18.6% in the March-May period. It is worth mentioning that the February decrease (-1.0%) was cyclical and reflected an accommodation in the services sector compared to the end of 2019.

Even with the second highest increase (5.0%) in the series started in January 2011, the volume of services in Brazil is still 24.0% below the record of November 2014, and 14.5% below February 2020, the month before social isolation.

The increase of 5.0% in the volume of services from May to June 2020 was spread through the five investigated activities. The highlights were the advances in transportation, support services to transportation and mailing activities (6.9%) and information and communication services (3.3%). The first branch grew 11.9% between May and June after, decreasing 25.2% in the March-April period. The second sector, on the other hand, grew again, after falling 9.0% in the first five months of the year.

The other advances came from professional, administrative and complementary services (2.7%), services rendered to families (14.2%) and other services (6.4%). The first interrupted a series of eight negative rates, with a cumulative loss of 20.4%. The second accumulated an increase of 29.9% between May and June, after decreasing 62.7% between February and April. The latter recovered part of the cumulative loss between March and May (-12.0%) by advancing 6.4% in June 2020.

The quarterly moving average for services decreased 2.9% in the quarter ended in June 2020 compared to the previous month, maintaining the downward trend that started in January.

Among the sectors, also in relation to the movement of this index on margin, all five activities showed negative results this month, with a highlight to the intense drop in services rendered to families (-13.1%), followed by professional, administrative and complementary services (-4.0%); transportation, support services to transportation and mailing activities (-3.1%); other services (-1.7%); and information and communication services(-0.9%).

In June 2020, the volume of the services sector fell 12.1% compared to June 2019, the fourth negative rate in a row in this indicator. In this month, there were falls in four of the five activities and increases in 27.1% of the 166 types of services investigated.

Among the activities, services rendered to families (-57.5%), transportation, support services to transportation and mailing activities (-11.3%) and professional, administrative and complementary services (-15.5%) performed the activities' main negative influences on the total volume of services. The services rendered to families were leveraged, to a great extent, by the drop in revenues of companies operating in the restaurant business; hotels; catering and food services; fitness activities; and courses.

In the second activity, the greatest pressure came from collective air and road transportation (both from passengers); cargo road transportation; and metro-rail transportation. While professional administrative and complementary services were impacted by the reduction of revenues in intangible asset management companies; electronic payment solutions; managing of loyalty rewards programs; cleaning services; travel agencies; car rental; and labor force recruiting.

Also with a drop compared to June 2019, but with less impact on the general index, information and communication services (-2.9%) showed loss of revenue in telecommunications; programmers and activities related to pay television; advisory in information technology; open TV; and film exhibition activities.

On the other hand, the only positive contribution in that month came from other services (4.4%), driven, above all, by the increase in income from security brokerage firms; administration of stock exchanges and organized over-the-counter markets; fund management activities by contract or commission; and collection of non-hazardous waste of domestic, urban or industrial origin.

In the cumulative result for the year, compared to the same period in 2019, the services sector decreased 8.3%, with a drop in four of the five disseminated and increased in only 27.7% of the 166 types of services investigated. Among the sectors, services rendered to families (-35.2%) exerted the most relevant negative influence, pushed, especially, by the drop in the revenues of restaurants; hotels; and catering and other prepared food services.

The fall increase in this sector (from -31.0% in the first five months of 2020 to -35.2% in the first half of 2020) is due to the partial or full shutdown of those establishments, because of the social distance measures to fight against COVID- 19.

Other negative pressures came from transportation, support services to transportation and mailing services (-8.5%) and professional, administrative and complementary services (-10.5%), with the reduction in the revenue of passenger air transportation companies; collective passenger road transportation; cargo road transportation; national mailing services; and passenger railway transportation, in the first sector.

In the second activity, there was a reduction in the revenues of companies that manage loyalty rewards programs; electronic payment solutions; management of intangible assets; general cleaning; travel agencies; private surveillance and security; and technical activities related to architecture and engineering.

With less impact on the general index, compared to other activities, information and communication services (-2.6%) presented revenue losses, especially in the telecommunications segments; programmers and activities related to pay television; film exhibition activities; advisorship in information technology; and satellite TV operators.

On the other hand, the only positive contribution, accumulated from January to June 2020, compared to the same period of the previous year, was with the other services sector (5.1%), driven, to a  large extent, by the increase in corporate revenues. whichdeal with securities and commodities brokerage segments; administration of stock exchanges and organized over-the-counter markets; collection of non-hazardous waste of domestic, urban or industrial origin; and fund management activities by contract or commission.

Services grew in 21 of the 27 Federation Units

Regionally, 21 of the 27 Federation Units had an expansion in the volume of services in June, compared to May, following the increase (5.0%) observed in Brazil - seasonally adjusted series. Among the places with positive results in the month, São Paulo (5.1%) had the most important growth, after falling 19.5% between February and May this year.

Other relevant positive contributions came from Rio de Janeiro (3.6%), Minas Gerais (4.7%), Rio Grande do Sul (6.6%) and the Federal District (6.6%). On the other hand, Mato Grosso (-3.2%), Paraná (-1.0%) and Espírito Santo (-3.2%) registered the main negative impacts in regional terms.

Compared to June 2019, the decline in the volume of services in Brazil (-12.1%) was seen in 26 of the 27 Federation Units. The main negative influence came from São Paulo (-10.8%), followed by Rio de Janeiro (-10.6%), Minas Gerais (-11.5%), Paraná (-15.2%), Rio Grande do Sul (-17.2%) and Bahia (-23.1%). On the other hand, the only positive contribution came from Rondônia (1.3%), driven, to a large extent, by activities related to agribusiness, such as the management of ports and terminals and road cargo transportation.

In the cumulative result from January to June 2020, compared to the same period of the previous year, the drop in the volume of services in Brazil (-8.3%) was widespread among the locations investigated: 26 of the 27 Federation Units showed a retraction in services real revenue. The main negative impact came from São Paulo (-7.7%), followed by Rio de Janeiro (-6.3%), Rio Grande do Sul (-14.4%) and Minas Gerais (-8.4%) . On the other hand, the only positive contribution in the national index came from Rondônia (3.7%).

Tourism index increases 19.8% in June

In June 2020, the tourism activity index grew 19.8% compared to the previous month, the second positive rate in a row, a period in which it accumulated a gain of 28.1%. It is worth noticing, however, that the tourism segment had a significant cumulative loss between March and April (-68.1%), reflecting the fact that preventive measures against the rapid spread of COVID-19 (such as encouraging social isolation) ) reached more intensely and immediately a good part of the companies that make up tourism activities, mainly, air transportation of passengers, restaurants and hotels.

Regionally, all twelve Federation Units followed this expansion trend observed in Brazil, especially São Paulo (19.6%), followed by Rio de Janeiro (23.7%), Minas Gerais (17.2%), Santa Catarina (26.1%) and Paraná (17.9%).

In comparison with June 2019, there was a decrease of 58.6%, the fourth negative rate in a row, pressured mainly by the drop in revenue from restaurants, air transportation, hotels, public passenger bus and catering services. In regional terms, all twelve Federation Units where the indicator is investigated showed a decrease in services aimed at tourism, especially São Paulo (-59.5%), followed by Rio de Janeiro (-50.8%), Minas Gerais Gerais (-54.0%), Bahia (-70.9%) and Rio Grande do Sul (-64.8%).

In the cumulative index from January to June 2020, the special aggregate of tourism activities showed a 34.6% decrease compared to the same period last year, pressured, mainly, by the restaurant branches; air transportation; hotels; collective passenger road transportation; and catering and other prepared food services.

All twelve locations investigated also had negative rates, with a highlight to São Paulo (-36.2%), Rio de Janeiro (-29.5%), Minas Gerais (-34.1%), Bahia (-33.7 %), Rio Grande do Sul (-40.6%) and Paraná (-34.2%).