The service sector is an integral part of the global economy, unlike the manufacturing sector that involves the production of consumer and capital goods. The service sector includes businesses that offer services that satisfy people’s need. Example of such services includes financial services, health services, educational services, transportation services etc.,
The global economy is in the midst of a recession. A world bank report suggests that the recession is the worst since the second world war. How is the global service sector faring amid the coronavirus pandemic? This little exposition aims to analyse the global service sector in a bid to ascertain the effect of the pandemic on this critical sector of the global economy.
Europe’s Service Sector.
According to statistics, the service sector accounts for about 74 per cent of the EU’s Gross Domestic Product. Emerging from the Chinese city of Wuhan, the coronavirus pandemic has led to a sharp decline in services activity across the Eurozone. Governmental policies to curtail the virus spread like social distancing, restrictions on movement is taking its toll on Europe’s economy in general and the service sector in particular.
According to data, Spain’s service sector is contracting for the first time in almost a decade. The story is the same in other European countries, Germany service sector has witnessed a massive retrenchment of workers, the highest in the past two decades.
The Composite Purchasing Managers Index, which is an economic indicator derived from companies, showed that the Eurozone’s manufacturing and service crashed from 51.6 per cent in February 2020 to 29.7 per cent in March. It is expected that the various government measures to cushion the effect of the coronavirus pandemic on the economy will help prevent things from getting worse.
Asia’s Service Sector.
The Asian service sector is not immune to the coronavirus induced economic strangulation. The international monetary fund reports that for the first time in six decades, the Asian economy will stagnate and not witness any growth. According to the same International Monetary Fund, shops, airlines, factories, have been the worst hit by lockdowns.
With almost two million recorded cases of the coronavirus, India’s service sector is bearing the scorch of the pandemic as it completely collapsed in April. The Indian government has announced a stimulus package of $266 billion to savour the situation and prevent things from getting worse. This is a hard time for the global economy.
America’s Service Sector.
A rising unemployment rate and an increasing coronavirus case on the American continent is a strong indication that America’s service sector, like all other sectors, is being hit hard by the coronavirus pandemic. It should be noted that America’s service sector employs a substantial number of America’s citizen, available data suggests that the United States’ of America’s service sector has has shed more than 90 per cent of jobs.
Africa’s Service Sector.
Africa seems to be the least affected continent by the coronavirus pandemic. This is not to suggest that its economy is left without a scratch from the coronavirus. Africa’s travel and tourism sector, which are integral parts of the service sector is being affected. The continent is finding it difficult to meets its financial obligation to its creditors as economic activities declines.
Amid economic uncertainties caused by the coronavirus pandemic, our only hope lies in scientists finding effective cure to rescue humanity from this nightmare.