Services fall 11.7% in April under covid-19

The effects of the coronavirus pandemic caused Brazil's service sector to decline 11.7% in April compared to March, in the most intense contraction of the historical series that began in 2011, reveals the Monthly Service Survey (PMS), released on Wednesday, 17 by IBGE. In March, which had only the last ten days affected with the closure of non-essential trade, the sector fell 6.9% compared to the previous month. April already gets 30 days of standstill. In relation to April 2019, the decrease was 17.1%, the second followed in this comparison and also the most intense in the historical series. Services, which began to suffer from reduced demand in February, had their third consecutive monthly decline and, in the year, accumulated a loss of 18.7%. The current level is 27% below the highest point in the series in November 2014. The impact of the crisis on the sector in April was slightly worse than expected by the market, whose expectation was around a 10% drop. For Exame Research, "the reopening of some segments in May and June should print better results by the end of the quarter," the house of review said in a report. The services sector has the greatest impact on gross domestic product (GDP), whose market forecast as measured by the Focus Bulletin is already down 6%. For André Perfeito, Necton's chief economist, the data confirms his expectations of a 9% contraction in the economy in the second quarter compared to the first. Added to them are retail performance data, released yesterday, with a 16.8% drop in sales in April, and those of the industry, which also came with negative records. All five activities investigated at the PMC had record falls in April. The largest were for transport, transport and mail ancillary services (-17.8%) and services provided to families (-44.1%). Together, the two sectors accumulated decreases of 24.9% and 61.6% in March and April, when social distancing policies against the dissemination of covid-19 were intensified. The contraction of services occurred in 26 of the 27 units of the federation, according to the research, especially the losses of São Paulo (-11.6%) and Rio de Janeiro (-12.7%), which suffered the most from the losses of the accommodation and food segments. The exception was Mato Grosso, where rail freight transported again grew in April due to the flow of grain production. The 9% increase, however, does not recover the 12.6% loss observed in March, ibge points out.