delivery channels. Several report they were already in process of bringing a new service offering to
market, and the pandemic has accelerated their launch plans as their clients find their needs shifting.
The rapid response to changing market needs may be driving an unusually sunny outlook in the services
industry, with expected revenue increases in the second quarter: 23% say they expect revenue to be up
versus the same period in 2019, and 6% say they expect that increase to be a dramatic one. At the other
end of the spectrum, 18% are forecasting a steep drop in revenue, and another 26% say they’re
expecting at least some decline compared to Q2 of 2019.
The percentage forecasting business growth continues to climb in Q3 and Q4, with 35% reporting an
expected increase in Q3 (and 12% expect the growth to be dramatic) and fully 41% say they expect
revenue increases in Q4 compared to 2019. Again, the percentage expecting dramatic increases is higher
than in any other industry studied, with 15% forecasting dramatic increases in revenue in the fourth
quarter compared to the same period in 2019.
Still, the outlook isn’t bright across all sectors, as 44% are forecasting revenues to be down versus 2019
in Q3, and 6% expect the decline to be a dramatic one. In Q4, the percentage expecting revenue to be
down compared to the previous year drops to 24%, with only 3% saying they expect the decline to be a
steep one.
Fully 71% of service industry respondents report securing a PPP loan, and loan forgiveness concerns are
moderate – 33% of respondents say it’s a concern, with an average level of 46 on a scale of 1 to 100.
71% also report that morale hasn’t changed, and 18% say they’ve seen morale increase.
The biggest concerns, as in many other industries, are about economic recovery time for the industry
(64% say this is one of their greatest concerns), the financial stability of customers and vendors (52%),
and employee issues including layoffs and furloughs, employee health, safety, and well-being (30%) and
PPP loan forgiveness, as noted above a concern for 33%. Other concerns include how services will be
delivered – whether they’ll return to delivering their services in person, or whether the delivery method
remains a virtual one – and timing of an effective vaccine for COVID-19.
Services industry responses to a question asking how their business had changed included:
• “Stronger emphasis on providing clients with support and shared value. Completely shifted to
virtual business development and meetings.”
• “We added a few services that play into our strengths and should bring value to our clients as it
relates to talent acquisition.”
• “Before the pandemic, we had previously decided to diversify our service offering, and were
making strides to execute that diversification. The pandemic further verified the need/demand
for the new services and motivated our company to accelerate/focus on growth. Part of this
accelerated growth included hiring a new part-time member of the team, and increasing
business development by 20%. That, plus increased demand of our current services to existing