Brazil Services Activity Contracts In January

(RTTNews) - Brazil's service sector deteriorated for the first time in sixteen months amid a renewed decline in new orders, survey results published by S&P Global showed on Wednesday.

The seasonally adjusted S&P Global Brazil Services Business Activity Index dropped to 47.6 in January from 51.6 in the previous month. Any score below 50 indicates contraction.

Further, this was the steepest decline in services activity since April 2021.

The falling trend in business activity in January was attributed to demand weakness and a subsequent decline in new business inflows, which was the most pronounced in nearly four years. Meanwhile, employment grew for the third successive month, though marginally.

On the price front, input price inflation accelerated to a 30-month high, stemming from relative US dollar strength, greater international prices, and a generally inflated domestic market. As a result, selling price inflation increased at the strongest rate in two and a half years.

Looking ahead, service providers expressed optimism about output expectations over the year, largely pinned on hopes of better demand trends and more favorable economic conditions.

The composite output index declined to 48.2 from 51.5 in December, signaling the fastest reduction in the Brazilian private sector since April 2021.

Elsewhere, industrial production in Brazil dropped 0.3 percent monthly in December after falling 0.7 percent in November, data from the statistical office IBGE showed. This was the third successive decline in a row.

With this result, industrial production is 1.3 percent above the pre-pandemic level, but it is still 15.6 percent below the record level reached in May 2011, the agency said.