The Institute for Supply Management (ISM) reported on Tuesday its non-manufacturing index (NMI) came in at 41.8 in April, which was 10.7 percentage points lower than the March reading of 52.2 percent. The April reading pointed to the first contraction in the services sector since December 2009 and the steepest decline since March 2009.

A reading above 50 signals expansion, while a reading below 50 indicates contraction.

Of the 18 manufacturing industries, 16 reported decreases last month, the ISM said, adding that respondents were concerned about the continuing coronavirus impacts on the supply chain, operational capacity, human resources and finances, as well as the uncertain timelines for the resumption of business and a return to normality.

According to the report, the ISM's non-manufacturing business activity measure fell to its record low of 26 percent, 22 percentage points lower than the March reading. The new orders gauge came in at 39.2 percent, 20 percentage points below February's reading. The Employment Index fell by 17 percentage points to 30 percent from the February reading. The Prices Index of 50 percent was 0.8 percentage point lower than the February reading of 50.8 percent, indicating that prices were unchanged in March. Meanwhile, the Supplier Deliveries Index registered an all-time high of 78.3 percent, up 16.2 percentage points from the March reading, limiting the drop in the composite NMI

Commenting on the data, the Chair of the ISM Non-Manufacturing Business Survey Committee, Anthony Nieves, noted, "The past relationship between the NMI and the overall economy indicates that the NMI for April (41.8 percent) corresponds to a 2.3-percent decrease in real gross domestic product (GDP) on an annualized basis."