Brazil Services Activity Expands Most Since June 2022

(RTTNews) - Brazil's service sector grew at the quickest pace in just over two years in July, spurred by robust demand conditions, survey results published by S&P Global showed on Monday.

The seasonally adjusted S&P Global Brazil Services Business Activity Index rose to 56.4 in July from 54.8 in the previous month. A score above 50 indicates expansion.

New business gains rose at the second-quickest rate in twenty-one months on the back of positive underlying demand. This encouraged firms to raise their workforce numbers in July, though overall employment expanded at a moderate pace.

However, cost pressures intensified, and the rate of input price inflation quickened to a 17-month high in July, partly due to currency depreciation. Higher costs for food, fuel, construction materials, energy, and rent also drove the overall rise in inflation. As a result, selling prices rose at the steepest pace since March last year.

The composite output index climbed to 56.0 in July from 54.1 in June, indicating the fastest growth in the Brazilian private sector since June 2022. Rates of growth quickened in the manufacturing and service sectors, with the latter leading the upturn.