Profits at the nation's 500 largest service companies fell 12% last year because they failed to plan for the recession, Fortune magazine said Wednesday.
In its annual ranking, Fortune said service companies "were apparently out picking daisies" instead of following the lead of industrial concerns, which trimmed work forces and boosted quality in anticipation of hard times.
From 1982 to 1990, the 500 largest manufacturers posted a 27% increase in productivity, based on inflation-adjusted average sales per employee, Fortune said. Over the same period, service companies had a 1% drop in productivity.
The Fortune 500 service companies' combined profits totaled $61 billion in 1990, down from $69.7 billion in 1989 and $79.5 billion in 1988, according to Fortune's June 3 issue.