WASHINGTON, May 5 (Xinhua) — The U.S. services sector contracted for the first time since December 2009 in April, the Institute for Supply Management (ISM) reported Tuesday.
The non-manufacturing index (NMI), which gauges the performance of the services sector, registered 41.8 percent, 10.7 percentage points lower than the March reading, according to the latest Non-Manufacturing ISM Report on Business.
“Respondents are concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality,” said Anthony Nieves, chair of the ISM’s non-manufacturing business survey committee.
The latest reading was the NMI’s lowest since March 2009, when it registered 40.1 percent. The Business Activity Index, in particular, fell 22 percentage points from March’s figure, registering 26 percent — the lowest reading for that index since the debut of the report in 1997.
The New Orders Index, meanwhile, registered 32.9 percent, 20 percentage points below the March reading. The Employment Index decreased to 30 percent, 17 percentage points below the March reading.
A business executive from the arts, entertainment & recreation industry said the COVID-19 pandemic has forced business to close as of mid-March, and “we do not have a re-opening date yet,” noting that “our purchasing activity has been greatly reduced due to the current business environment.”
“COVID-19 is altering the operation, supply chain and sales process of home-building. Stay-at-home orders have hampered business in residential construction,” said an executive from the construction industry.
Some 16 non-manufacturing industries reported a decrease in April, while only two industries, public administration and finance and insurance, saw growth in the month.
“The past relationship between the NMI and the overall economy indicates that the NMI for April (41.8 percent) corresponds to a 2.3-percent decrease in real gross domestic product (GDP) on an annualized basis,” Nieves said.
The Purchasing Managers’ Index (PMI), meanwhile, fell by 7.6 percentage points to 41.5 percent in April, the lowest since April 2009, according to the ISM’s report last week. Enditem
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