When the COVID-19 pandemic first hit and started massive health consequences around the world, it also created an exponential economic downturn in various parts of the economy everywhere in the world.
One of the sectors that had a massive impact was the services sector.
Economic activity in the services went down drastically because there was no need for the service sector as much as there was before COVID since everyone was at home and many people were in quarantine.
However, things are starting to pick up since the COVID pandemic’s peak.
Institute for Supply Management makes a monthly report to oversee certain details of the economic growth, and the services report is one of them. We will examine July 2020 services ISM report.
Services Industry Performance
Institute for Supply Management’s July 2020 services report shows us some positive news since the start of the COVID-19 pandemic at the start of the year.
COVID has slowed down recently in the past few months, which, in turn, started to help the economy, including the services, because the July 2020 ISM report on services shows us a second consecutive growth in the services sector.
Services PMI saw an increase of one percent from the month of June, recording the second consecutive increase after the last contraction in April.
Before the services sector started its contradiction, there was a massive 122-month continuous expansion in the sector.
This is another proof that COVID has a big effect on the ever-growing industries.
The increase in the services sector’s economic activity also comes with a price because the supplier deliveries index saw a second continuous month of decrease. Deliveries index came at 55.2%, a 2.3% fall from June’s statistic.
Along with the decrease in deliveries, we also can see a decrease in the prices index.
The decrease in the prices index means that the rate of prices going up went down, showing signs of lowering inflation in certain services activity.
The prices index came at 57.6%, down 4.8% from June’s statistic of 62.4%.
Effects On Economic Growth
While we are seeing a second continuous increase in the economic activity in the services sector, we also see some decreases in some important indexes, such as the delivery side of things.
The more increase there is in the services sector, the harder it gets to deliver the needs because COVID shut everything down during COVID, and picking up with the abnormal increase in the services sector will be exceptionally hard for deliveries since there might not be enough capacity to deliver.
The Verdict
To sum everything up, in July 2020 ISM services report, we are seeing good statistics because the economic activity in the services sector is picking up with a second straight month increase with about one percent increase from the preceding month of June.
Along with the increasing economic activity, the price increases are also stopping because the prices index went down around 4% this month compared to June, the previous month.
However, the delivery side is not looking good as the supplier deliveries have been shrinking for two consecutive months now.
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