Compare our experience in the first half of this year with the first six months following the Lehman crash. After Lehman, manufacturing contributed 2.8 percentage points to the recession and services contributed 1.7 percentage points. But this year, the loss was 9.8 percentage points for services and much less, 3.2 percentage points, for manufacturing. This has three important implications.
First, research finds that the recovery from a services-led recession tends to be slower than from a durable goods-led recession, as services create less pent-up demand than consumer goods.1 For example, people are unlikely to take twice as many holidays abroad next year to compensate for their lack of foreign travel this year.