Brazil’s service sector started the second quarter with the highest growth rate in 15 years, thanks to increased demand in the face of the easing of restrictions to contain the pandemic, and despite a record inflation of prices charged in April, according to the survey. Purchasing Managers Index (PMI).
Data released this Wednesday (4) by S&P Global showed that the Services PMI advanced to 60.6 in April from 58.1 in March, a reading that was only below the 60.8 seen in April 2007, only the second month of the survey.
The result was favored by the lifting of restrictions against Covid-19, favorable public policies and a recovery in demand, according to S&P Global. A reading above 50 indicates expansion of activity.
New service orders expanded in April at the strongest pace in just under 15 years, with consumer services in particular.
The month was marked by a sharp rise in service sector input costs, with the inflation rate reaching the second level in the survey’s history, behind only the record in November. Panellists cited the strength of the dollar, in addition to higher costs for fuel, raw materials, transport and utilities.
This was passed on to the consumer, with the rate of prices charged thus hitting a record in the historical series, especially in the Transport, Information and Communication subsector.
Still, improving demand conditions associated with the replacement of laid-off employees during the peak of Covid-19 helped create job openings in April for the 11th straight month and at the strongest pace since June 2007.
“The increase in demand has translated into the best round of job creation among service providers since mid-2007, a good sign for the labor market and future consumption,” said Pollyanna De, associate economics director at S&P Markit. Lime.
Regarding the future, service providers in Brazil showed strong optimism, with the level of positive sentiment reaching the highest level in seven months. Companies anticipate improvements in the economy, as well as in demand conditions, job creation and increased investment.
The service sector result helped Brazil’s Composite PMI rise from 56.6 in March to 58.5 in April, the highest level since October 2007.
Source: CNN Brasil
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