by Calculated Risk on 3/27/2020 11:47:00 AM

Usually I don't cover the service surveys, but the regional surveys are timely and are showing the sharp decline in activity.

From the Kansas City Fed: Tenth District Services Activity Decreased Significantly

The Federal Reserve Bank of Kansas City released the March Services Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District services activity decreased significantly in March to the lowest level in survey history (since 2014), and firms expected business activity to drop further in the future.

“We saw a significant decrease in regional services activity as businesses were negatively affected by COVID-19, and firms expected more activity to drop off moving forward,” said Wilkerson. “Over 54 percent of firms expected lower levels of employment for 2020 due to COVID-19 and recent market volatility, and nearly 63 percent of contacts were concerned about cash availability.”
…
The month-over-month services composite index was -16 in March, the lowest posting since the survey started in 2014, and down significantly from 6 in February and 14 in January … Expectations for future services activity decreased sharply, and the expected composite index posted the worst change from a month ago in survey history, dropping from 23 to -30.

A few survey comments:

“Currently closed to public, thus no business, which is tolerable in the short-term, but would be problematic long-term.”

“With customers staying at home we have no sales. This may force us to shut down temporarily.”

“We need access to cash fast… business has dropped 95% in the last 4 days.”

“(Business activity) has dropped to basically zero. Until schools reopen we are going to greatly suffer. We have tremendous uncertainty - how long will this last - 1 month - 2 months - 6 months - it will bankrupt us eventually if it is prolonged.”