News Column

Brazil Service Sector Expansion Slows Sharply In July

August 5, 2014

BRASILIA (Alliance News) - Brazil's service sector activity in July expanded at the slowest pace since the start of the year, suggesting weak economic conditions, survey figures from Markit Economics showed Tuesday.

The HSBC purchasing managers' index fell to 50.2 in July from June's 6-month high of 51.4. Any reading above 50 indicates expansion in the sector. The score was also below the average observed in the first half of 2014.

The HSBC Brazil composite output index eased to 49.3 in July from 49.9 in June. The score was the lowest since August 2012. A sharp fall in manufacturing was partially offset by a modest rise in services activity, Markit said.

The soccer World Cup was reported to have had both positive and negative impacts on services activity. Among the six sub-sectors, activity expanded in five in July and shrunk in renting and business segment.

In July, new orders rose only moderately, marking a 23-month period of expansion, led by the soccer World Cup impact. But new works in the manufacturing industry fell marginally, while new business in the private sector grew slightly during the month.

Companies raised their staffing levels for the seventeenth month running in July and at a faster rate than in June, amid reports of stronger order books. Meanwhile, outstanding business in the service sector fell fractionally in July to extend the depletion trend to eight months.

Input prices in the service sector continued to rise in July, but the inflation was weakest registered in the series history.

Input prices in the private sector rose at a slowest rate since the series began in 2007. Output price inflation eased in July and was below the series-average.

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Source: Alliance News

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