The growth of Brazil’s service sector slowed in the second quarter, as weaker April sales took a toll.
The Purchasing Managers’ Index (PMI) from S&P Global showed a decline from 54.8 in March to 53.7
in April, indicating continued but slower expansion. Despite this dip, the PMI remained above 50, showing growth for the seventh month in a row.
Industry insiders attributed the slower growth to local shows, marketing campaigns, and events that buoyed sales less than expected.
Although demand remained resilient, sales increased at a slower pace than in March.
Service providers responded by expanding their workforce for the seventh straight month, but hiring rates also fell.
April optimism was the lowest in nine months, with only 44% of participants predicting higher activity in the coming year.
They cited steady demand, new customer proposals, organized events, and marketing strategies as reasons for hope.
Rising input costs, including labor, utilities, and transportation, pushed April expenses higher.
The inflation rate remained at March’s peak, its highest since October. The real’s depreciation against the dollar also contributed to increasing expenses.
Service provider prices rose but at their slowest rate since October 2023, as businesses tried securing new orders with price discounts.
Meanwhile, the manufacturing sector experienced its strongest expansion in nearly three years, but this couldn’t counterbalance the services sector’s slowdown.
As a result, Brazil’s Composite PMI slipped from 55.1 in March to 54.8 in April.
This PMI downturn reflects a broader trend in Brazil’s economy, where rising costs and fluctuating global conditions present challenges.
Understanding these dynamics will be vital for businesses looking to navigate this shifting landscape and maintain sustainable growth.