Services Sector Shrinks for First Time in 10 Years

For the first time since the end of the Great Recession, the U.S. non-manufacturing services sector has shrunk.

The non-manufacturing index from the Institute for Supply Management – a respected gauge for accurate business and supply chain metrics in the country – dropped by over 10 points from March to April. That’s the largest drop since the end of 2009, and has plunged the index into the range where the services sector is considered to be contracting.

Other indices in the recent report, including those measuring business activity and employment, saw double-digit decreases between March and April. The business activity index reached its lowest point in recorded history at 26 percent. The only significant increase was seen in the supplier deliveries index, which rose by 16 points to 78.3 percent.

While social distancing restrictions are slowly lessening in the U.S., the economic impact of the nationwide lockdown will be felt for the rest of 2020 and possibly for the next several years. According to some financial experts, any economic rebound may not be seen until 2021.