U.S. service PMI collapses in April

The latest data signaled a substantial decline in business activity across the U.S. service sector in April, as the COVID-19 outbreak escalated and emergency public health measures intensified. The rate of contraction accelerated to the fastest on record as client demand slumped and many businesses closed temporarily. New order inflows fell significantly as customers postponed or cancelled orders amid ongoing global lockdowns. Subsequently, expectations for the year ahead sank to their most pessimistic in the series history. Uncertainty and a further reduction in confidence led to the steepest decrease in workforce numbers on record. 

In an effort to retain clients, firms passed lower costs on to clients through the fastest decrease in output charges in the series history. 

The seasonally adjusted final IHS Markit US Services Business Activity Index registered 26.7 in April, down notably from 39.8 in March and fractionally lower than the previously published 'flash' figure of 27.0. Efforts to adhere to social distancing and stay-at-home measures resulted in many services firms struggling to remain open, with client demand also dropping significantly.