In 2019, the services sector had 1.4 million enterprises, which generated R$1.8 trillion in net operating revenue and R$1.1 trillion in value added. The sector employed 12.8 million persons, who received R$376.3 billion in salaries, withdrawals and other compensation.

Compared to 2018, the number of employed persons in the services sector increased by 2.1%. The sector's gross revenue totaled R$2.0 trillion, of which 2.6% came from secondary activities, such as the resale of goods and the sale of self-made products.

Between 2010 and 2019, the Information and Communication Services segment was the only one of the seven analyzed segments that decreased its share, 5.6 percentage points (pp), in the generation of net operating revenue, mainly due to the 6.1 pp drop in the telecommunications sector. The Transportation, support services for transportation and mailing segment concentrated the largest share of net operating revenue (29.0%).

In second position comes the sector of Professional, administrative and complementary services (27.0%). Next, Information and communication services (21.8%), Services provided mainly to families (11.7%), Other service activities (6.5%), Real estate activities (2.4%) and Maintenance and repair services (1.6%).

Between 2010 and 2019, the average employment of the services sector dropped from 11 to 9 persons per enterprises. The Transportation, support services for transportation and mailing segment had the highest average employment: 15 workers per enterprise.

The average monthly salary decreased from 2.5 minimum wages in 2010 to 2.3 mw in 2019. Information and communication services (4.5 mw), Other service activities (3.0 mw) and Transportation, support services for transportation and mailing (2.8 mw) continued to pay salaries in 2019 above the sector's average. Services rendered mainly to families had the lowest average salary (1.5 mw).

These are some highlights of the 2019 Annual Survey of Services (PAS).

Transportation accounts for 29.0% of Services revenue

In 2019, the segment of Transportation, support services for transportation and mailing was responsible for most of the net operating revenue of the Services sector, with 29.0% of contribution. Among the sector’s activity, the highlight is Road cargo transportation, leading in terms of contribution in the net revenue of the sector and accounting for 11.0% of the Services revenue in 2019, against 10.5% in 2010.

Storage and support activities for transportation contributed with 22.2% to the net revenue and increased 2.4 pp in the period, recording the highest participation growth in the segment from 2010 to 2019.  Conversely, the groups of Passenger transportation, Mailing and other delivery activities and of Air transportation had contribution drops of 3.6 pp, 1.3 pp and 0.9 pp, respectively in the segment.

Professional, administrative and complementary services occupied the third position in the Services sector ranking in 2010 and advanced one position in 2019, with high of 1.4 pp in the contribution to the net operating revenue. In relation to the segment as a whole, Office and administrative support services grew 2.8 pp in ten years. Conversely, Technical-professional services – accounting, architecture, judicial services etc – retreated 2.2 pp, but remains as the main activity, with 38.9% of contribution in the segment.

Telecommunications fall 6.1 pp causing impact on Information and communication services

Between 2010 and 2019, Information and communication services was the only one of the seven segments of the survey to lose contribution, 5.6 pp in the net operating revenue. In 2010, it was the second, but it lost the position to Professional, administrative and complementary services. Such loss was mainly due to Telecommunications, which went from 15.3% of contribution to the revenue in 2010, to 9.2% in 2019, falling from the first to the third position.

The group of Information technology become the most important one, not only in the segment, but in the Services sector, with 9.2% of the net revenue and a gain of 2.8 pp in one decade.

Although Services rendered mainly to families kept its fourth position in the ranking, with 11.7% of the total net operating revenue, it had a gain of 2.1 pp, the biggest positive change in participation among the seven segments of services in the ten-year period.  The activity of Food services was the most relevant in the segment, with a contribution of 65.5% in 2019. Between 2010 and 2019, the group of Continued education activities was the one that advanced the most, gaining 1.6 pp of contribution in the segment, while Lodging services, in turn, had the strongest fall (-3.3 pp).

The other three segments of the sector, comprising Real estate activities, Maintenance and repair services and Other service activities, accounted for 10.5% of the net operating revenue, a high of 1.8 pp in ten years. Most of that gain was due to the growth in Financial support services, for insurance and complementary pension funding – which belongs to the segment of Other service activities - the second activity in the services sector to grow more in the period, with a 1.6 pp gain in contribution.

Market concentration fell 2.6 percentage points in 2019

The Services sector as a whole presented a low level of concentration in 2019, recording concentration ratio of level 8 (R8) of 9.1%.  The index measures the proportion of the net operating revenue which is generated by the eight biggest enterprises of an activity. There was reduction of 2.6 pp in the index over 2010, influenced by a 4.6 pp drop in this indicator for Information and communication services, a segment that had the highest concentration in 2019 (36.0%).

This downward trend also occurred to the segments of Transportation, support services to transportation and mailing, with concentration decrease from 1.7 pp and R8 of 15.0% in 2019; Services rendered mainly to families (-1.0 pp) and R8 of 8.2%; and Professional, administrative and complementary services (-2.7 pp) and R8 of 5.2%.

The concentration of the three other segments (Other service activities, Real estate activities and Maintenance and repair services) increased, reaching in 2019 with R8 of 19.2%, 11.6% and 10.6%, respectively.

Professional, administrative and complementary services held 40.8% of the employment

Service enterprises employed a total of 12.8 million persons in 2019, an increase of 2.4 million persons in ten years and growth of 22.9%. Professional, administrative and complementary services employed 40.8% of the total, with 5.3 million persons, representing an increase of 943.5 thousand workers in the ten-year period. Next, Services rendered mainly to families (22.2%) employed 2.8 million persons, an increase of 675.1 thousand persons. As a result, this segment surpassed that of Transportation, support services for transportation and mailing (19.3%), which moved to the third position, employing 2.5 million persons, an increase of 277.3 thousand persons.

Information and communication services (8.4%) is the fourth in the ranking with 1.1 million persons, an increase of 263.9 thousand persons between 2010 and 2019. Finally, Other service activities (4.0%), Maintenance and repair services (3.3%) and Real estate activities (2.0%) employed a total of 1.2 million persons in 2019. Between 2010 and 2019, these segments together grew by 235.8 thousand employed persons. Real estate activities registered the highest growth rate in the number of employed persons in this period, increasing its workforce by 83.5%.

From 2010 to 2019, the average number of workers per enterpise drops from 11 to 9

Between 2010 and 2019, the average number of employed persons decreased, from 11 to 9 persons. Among the segments, Other service activities; Professional, administrative and complementary services; Transportation, support services for transportation and mailing; and Real estate activities showed a reduction in the average number of persons employed by enterprises, while the others remained unchanged in the period.

On average, Transportation, support services for transportation and mailing had the largest average size of enterprises (15 persons), mainly influenced by the activities of Railway and subway transportation (974 persons), Pipeline transportation (862 persons) and Air transportation (272 persons). These represented the highest values ​​for the average size indicator among the 34 groups.

The average compensation of workers in non-financial services enterprises, calculated in minimum wages (mw), dropped from 2.5 mw to 2.3 mw between 2010 and 2019. Information and communication services (4.5 mw), Other activities services (3.0 mw) and Transportation, support services for transportation and mailing (2.8 mw) continued to pay in 2019 salaries above the sector average. Despite the downward trend in most activities, some showed a small positive change in average compensation compared to 2010, such as Services provided mainly to families (1.5 s.m.) and Other service activities (3.0 s.m.).

Paraná surpasses Rio Grande do Sul and Santa Catarina surpasses Bahia

In 2019, São Paulo, Rio de Janeiro and Minas Gerais generated, respectively, 42.9%, 11.7% and 7.6% of gross revenue from services in Brazil, occupying the top three positions in the national ranking, which remained unchanged from 2010. Other structural changes highlighted were: Paraná advancing from fifth to fourth position, swapping positions with Rio Grande do Sul; and Santa Catarina reversed its position with Bahia, going from seventh to sixth position in the national ranking. These same movements also ocurred in the seven first positions concerning the distribution of employed persons in the Federation Units.

In 2019, the segment of Transportation, support services for transportation and mailing was the most relevant in four regions, with a share of 39.2% in gross revenue in the North Region, 30.3% in the Northeast, 34.8% in the South and 34.7% in the Central-West. The exception was the Southeast.

In the Southeast, there was greater homogeneity between activities and the three main segments – Services rendered to enterprises (27.5%); Transportation, support services for transportation and mailing (26.0%); and Information and communication services (25.4%) – accounted for 78.9% of the gross revenue from Services in the Region. There was an increase of 2.0 pp in the participation of Services rendered to enterprises, going from the third to the first position, in ten years. Information and communication services suffered the biggest retraction in this period: - 5.4 pp.

Similar structural changes took place in the Northeast and Central-West, where Information and Communication Services lost its lead in the ranking. This segment showed a decrease in participation in all other regions between 2010 and 2019, of 12.4 pp in the Central-West Region, 12.2 pp in the North Region, 11.1 pp in the Northeast Region, 6.5 pp in the South Region .

In ten years, Southeast loses participation in employment

The Southeast Region maintained the predominance of regional participation, with 56.6% of the total employed persons, but with a reduction of 3.7 pp in the last ten years. This reduction foi offset by the expansion of 1.7 pp in the South Region and 1.1 pp in the Northeast Region, which began to concentrate, respectively, 17.5% and 15.0% of the workforce in 2019.

Salaries, withdrawals and other compensation had similar changes, with a loss of 3.9 pp in the Southeast Region compared to the increase, mainly, in the South, Northeast and Central-West Regions, which advanced 1.9 pp, 1.0 pp and 1.0 pp, respectively.

Enterprises in the Southeast paid an average of 2.5 mw in 2019, above the Brazilian average (2.3 mw). Between 2010 and 2019, in turn, all the Major Regions showed a reduction in the average salary, especially the Southeast, which reduced by 0.3 mw, and the Northeast, which paid the lowest compensation in the country, between 2010 and 2019 (1.7 mw).

São Paulo was responsible for 67.2% of the revenue from Services in the Southeast

In the South Region, Paraná increased its share by 0.4 pp, reaching 36.9% of the total in 2019, while Rio Grande do Sul lost 4.4 pp, reaching 35.9% of the Region's share. Despite registering the biggest gain in participation in the South Region, advancing 4.0 pp in ten years, Santa Catarina maintained the third position in the ranking, registering 27.2% of participation.

In the Southeast Region, São Paulo, leader in the regional ranking, gained 2.3 pp of share between 2010 and 2019, reaching 67.2% of gross revenue in the region. In second place came Rio de Janeiro (18.3%) with a decrease of 2.8 pp. Minas Gerais (11.9%) maintained the third position in this ranking in 2019, with Espírito Santo (2.6%) coming next.

In the Northeast, the gross revenue remained concentrated in Bahia (31.4%), Pernambuco (22.2%) and Ceará (17.9%), which together reach 71.5% of the region's total. Despite maintaining the third position in the ranking, Ceará was the state that most gained in participation in ten years in the region, with an increase of 2.1 pp, while Bahia was the one that lost the most, with a decrease of 2.6 pp in the time course. There was also an exchange of positions between Paraíba (4.6%) and Alagoas (4.3%), with the former reaching the sixth position and the latter dropping to the seventh in the regional ranking.

In the Central-West there was a loss of 4.7 pp in the Federal District (37.8%) and 2.0 pp in Goiás (26.2%), which occupied the second position in 2019. This retraction was counterbalanced by the 6.4 pp advance in Mato Grosso, which reached 22.1% of gross revenue in the region in 2019 and third place in the ranking, as well as Mato Grosso do Sul, which concentrated 13.9% of revenue, but had a slight advance (0.3 pp) between 2010 and 2019.

In the North Region, Amazonas (38.2%) and Pará (36.5%) concentrated the largest share of gross revenue from services. Pará registered the biggest gain in participation in the total region in ten years, with an increase of 2.3 pp. Tocantins, which had a gain of 2.2 pp and with whom it swapped positions in the ranking. Similarly, in the regional ranking Acre (3.2%) rose to fifth position, and Amapá (3.0%) fell to sixth position between 2010 and 2019.