MNI INTERVIEW: Unrest Seen Denting US Services Recovery: ISM

By Brooke Migdon

     WASHINGTON (MNI) - Civil unrest will further slow a U.S. economic recovery

hampered by cautious state re-openings, the chair of the Institute for Supply

Management's non-manufacturing barometer told MNI Wednesday.

     "Recent happenings seem to be an impediment on how things recover," Anthony

Nieves said in an interview, referring to protests that broke out nationwide

last week following the death of George Floyd, a black man killed by a white

police officer in Minneapolis on May 25. 

     "Businesses being impacted by this -- especially small businesses -- will

struggle immensely to come back," Nieves said. "They were struggling to begin

with."

     Firms deemed non-essential during Covid-19 began to re-open for the first

time last month following what was in some cases a months-long closure. Some may

have already used up their cash on hand to stay afloat and might not have the

resources to repair their business or remain closed through the protests, he

said.

     --'HUNKERING BACK DOWN'

     The ISM non-manufacturing index increased 3.6 points in May to 45.4, with

the readings below 50 signaling contraction. The business activity sub-index

increased 15 points to 41, and the employment sub-index inched up to 31.8 in May

from 30 in April.

     Nieves said the non-manufacturing sector had "bottomed out" and was

beginning to recover before riots broke out, prompting further shutdowns and

police-enforced curfews. People are "hunkering back down again," he said, and

businesses in re-opened states are "right back to lockdown."

     "It looked like we were at least finding the road to recovery," before the

protests, he said. Employers were beginning to call back workers as activity

picked up and all signs pointed to a partial recovery in the second half of

2020.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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