Brazil services growth level off in December, PMI shows

RIO DE JANEIRO, BRAZIL – Brazil’s services sector ended 2021 with growth stabilizing amid a weaker pace of new orders expansion in December from the previous month, according to the Purchasing Managers’ Index (PMI) survey released Wednesday.

IHS Markit reported that its Brazilian services PMI stood at 53.6 in December, matching November’s mark, but “with companies ending 2021 in a much better way than they started, as vaccine progress and pandemic recedes underpinned continued recoveries in sales and production.

Thus, the indicator closes the year above the 50 mark, which separates growth from contraction, with respondents citing the return of in-person events and the release of some pent-up demand with the easing of restrictions against Covid-19.

New order growth was at a slower pace than in November. The highlight of the increase in total sales was the international demand, which grew for the first time in four months.

New business increased, with December hiring secured, but the rate was the slowest since August.

Spending rose again in late 2021, with input costs rising sharply, but at the weakest pace in five months. Higher prices were reported for several items, as well as for energy and fuels, due in part to weakness in nature and materials shortages at suppliers.

The rate of inflation was also the lowest in five months, but remained above the long-term average as cost increases were passed on to customers.

Looking ahead 12 months, expectations for activity remained positive in December, but also declined from November. Marketing initiatives and progress on immunizations supported optimism.

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