The services sector grows for the third consecutive month, but still does not eliminate the losses due to the pandemic | economy

In 3 months, the sector accumulated a growth of 11.2%. The result, however, has not yet been enough to recover the 19.8% drop between February and May.

According to IBGE, the volume of services remains 9.8% below the level of February, the month prior to the start of isolation measures to contain the coronavirus.

Compared to August 2019, the volume of services decreased by 10%, the sixth negative rate followed on this basis of analysis.

According to the research manager, Rodrigo Lobo, to resume the pre-pandemic level, the services sector still needs to advance 10.8%. He also noted that none of the 5 segments surveyed fully recovered the losses from the pandemic.

“Regarding the sector, none has returned to the pre-pandemic level and even with the accumulation of positive rates it makes recovery difficult because the comparison base is higher. So the upcoming rates may take a bit of breath. Recovery will take some time. I think it is difficult for it to happen this year. In 2020, we may not see this, ”he said.

9% loss to date and record drop in 12 months

In the accumulated result of the year, the sector still fell by 9% compared to the same period of last year, registering expansion in only 25.3% of the 166 types of services investigated.

In the 12 months to August, the loss accelerated to a record negative rate of -5.3%, from -4.5% in July, showing difficulties in recovering activities related to the provision of services.

“The rate of the last 12 months fell by 5.3% in August 2020, maintaining the downward trend that began in January 2020 and reaching the most intense negative result in the series of this indicator, which began in December 2012” , reported the IBGE

According to IBGE, the volume of services in the country is 19.8% below the peak of the historical series of the survey, registered in November 2014.

Regionally, 21 of the 27 units of the federation expanded in August, with emphasis on São Paulo (2.5%), Minas Gerais (5.8%), Rio de Janeiro and (1.9%) and Santa Catarina ( 3. 4%). The main pressures came from Mato Grosso (-2.7%) and Tocantins (-5.5%).

Restaurants and hotels are the highlight

Sectorally 4 of the 5 activities showed an increase in the volume of services in August, with an emphasis on services provided to families (33.3%), driven by the reopening of restaurants and hotels.

Variation in the volume of services in August, by activity and subgroups:

• Services provided to families: 33.3%
• Accommodation and food services: 37.9%
• Other services provided to families: 9.1%
• Information and communication services: -1.4%
• Information and communication technology services: -1.6%
• Telecommunications: 0.2%
• Information technology services: -4.1%
• Audiovisual services: 3.3%
• Professional, administrative and complementary services: 1%
• Technical and professional services: 0.9%
• Administrative and complementary services: 0.8%
• Transport, auxiliary services to transport and mail: 3.9%
• Land transport: 4.3%
• Water transport: -1.9%
• Air transport: 14.6%
• Storage, auxiliary transport and mail services: 2%
• Other services: 0.8%

According to IBGE, the increase in services provided to families was the largest in the historical series, but the segment is still far from recovering the losses of March and April, such a drop. “For the services provided to families to return to the level of February, they still need to grow by 72.2%,” said the research manager, Rodrigo Lobo.

Another highlight was the advance of transport, auxiliary transport services and postal services (3.9%). The activity accumulated a gain of 18.8% in four months, but neither did it recover the losses of March and April (-25.2%).

The other advances in the sector came fromprofessional, administrative and complementary services (1%) and other services (0.8%). The only negative result was with information and communications services (-1.4%).

Among the segments, the segment of other services is the closest to eliminating losses due to the pandemic, needing to advance a further 1.1% to recover the level of February. Lobo explained that the main highlight is services related to financial activities, especially the administration of stock exchanges and real estate brokers.

Service recovery is the slowest

The services sector has been one of the most affected by the coronavirus pandemic and has shown a slower recovery than that observed in commerce and industry, especially in face-to-face activities.

“The services provided to families, which include restaurants, hotels, gyms and beauty salons, were the ones that most felt the adverse effects of the pandemic. With the resumption of activities, some companies were opened, but with limited service capacity. These companies show some recovery, but with a ‘recovery ceiling’, as they do not have full service capacity, compared to the pre-pandemic period. This is aggravated by the fear of some families to consume these services, such as going to restaurants or traveling ”, explained the head of the investigation.

The researcher also highlights a more limited impact of emergency aid in the service sector. “The people who receive it, generally direct it to more essential consumption, such as supermarkets, for example. Little of this resource is destined for consumption in restaurants or travel ”, he said.

• Services and commerce cause layoffs during the year; see the jobs that lost the most jobs

Comparison with other sectors and perspectives

After the record drop in the first half, the economy has shown a reaction in the third quarter. However, the recovery has been shown to be uneven across sectors.

Last week, the IBGE showed that commercial sales grew 3.4% in August. As a result, the sector reached the highest level of sales in 20 years, exceeding the pre-pandemic level by 8.9%.

The industry advanced 3.2% in August, reaching the fourth consecutive maximum, but it still remains 2.6% below the level seen in February, before the stoppages and restrictions to contain the pandemic.

The current market estimate is a 5.03% drop in GDP in 2020 and a 3.5% increase in 2021, according to the latest Central Bank Focus survey. The International Monetary Fund (IMF) projects a 5.8% drop in the Brazilian economy this year.

Analysts point out that high unemployment, the prospect of ending aid programs, and uncertainties about the health of public accounts and the advancement of the reform agenda are the main challenges in keeping up with the economic recovery.

Tourism activity advances for the fourth consecutive month

The tourist activity index also showed an increase of 19.3% in August, accumulating a growth of 63.4% in 4 months. The indicator, however, has not yet eliminated the 68% losses registered between the months of March and April, when several companies, mainly passenger air transport, restaurants and hotels, interrupted their activities due to the pandemic.

Compared to August 2019, the volume of tourism activities fell by 44.5%, the sixth consecutive negative rate.

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