Brazil services sector expands in Sept for first time since Feb - IHS Markit PMI

BRASILIA, Oct 5 (Reuters) - Brazil’s services sector expanded in September for the first time in seven months, a purchasing managers’ survey showed on Monday, but still shed jobs at a rapid pace and saw a slight decline in expectations.

IHS Markit’s Brazil services purchasing managers index (PMI) rose to 50.4 from 49.5 in August, the first reading above 50.0 since February before the COVID-19 pandemic battered the sector which accounts for some 70% of all economic activity in Brazil.

A reading above 50.0 marks expansion, while a reading below signifies contraction.

The slight rise in services followed the manufacturing PMI which inched up to 64.9 in September, a record high since the index was launched in 2006.

The composite PMI encompassing services and manufacturing fell, however, to 53.6 from 53.9 in August, which was the highest since January 2013.

“It’s welcoming to see a renewed rise in business activity, even if only fractional. That said, service providers continue to shed jobs amid attempts to keep a lid on costs,” said Pollyanna De Lima, economics associate director at IHS Markit.

“A revival in the service sector complemented the positive results from manufacturing. Together, these translated into sustained growth of business activity and new work intakes across the combined private sector,” she said.

Within services, the employment index edged up to 45.4 from 45.0, indicating the seventh consecutive month of hefty job cuts.

The business expectations index slipped to 69.7 from 70.6, while the input prices index rose to 62.2 from 55.5, the highest since June 2018.

Aggregate employment across both sectors declined, and input cost inflation across both sectors rose to its strongest in over four and a half years, the IHS Markit figures showed. (Reporting by Jamie McGeever Editing by Chizu Nomiyama)

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