The services industry in Brazil showed signs of weakness in July, setting a worrying tone for growth in the second semester after a disappointing first half of the year.
The HSBC bank purchasing managers’ composite index, or PMI, for July weighed in at 49.6 points, down from 51.1 in June. Any figure below 50 points indicates contraction in the sector. The Services Business Activity Index fell from 51.0 in June to 50.3 in July.
The survey adds to the uncertainty that’s overshadowing a recovery in Latin America’s largest economy, as the services industry has been one of the few drivers of growth in recent quarters.
Brazilian economists and analysts have again cut their forecasts for growth this year: while that’s mainly due to tepid performance expected for the industrial sector, weakness in services only adds to the gloom.
The median forecast from some 100 respondents to the central bank’s weekly survey fell to 2.24% growth this year from 2.28% last week.
For next year, they maintained their outlook at 2.60%. HSBC said that in July, growth of business activity at services companies eased, while production at manufacturers fell for the first time since last August.
Slower rises in business activity were linked by panelists to weaker gains in new work, an increasingly fragile economy and national protests, it said. New orders placed at private sector firms in Brazil fell slightly in July.
Growth of new business across the service sector eased, with firms suggesting that demand was maintained but that political problems, tough economic conditions and the protests had all weighed on growth, the survey said.
wsj.com
The HSBC bank purchasing managers’ composite index, or PMI, for July weighed in at 49.6 points, down from 51.1 in June. Any figure below 50 points indicates contraction in the sector. The Services Business Activity Index fell from 51.0 in June to 50.3 in July.
The survey adds to the uncertainty that’s overshadowing a recovery in Latin America’s largest economy, as the services industry has been one of the few drivers of growth in recent quarters.
Brazilian economists and analysts have again cut their forecasts for growth this year: while that’s mainly due to tepid performance expected for the industrial sector, weakness in services only adds to the gloom.
The median forecast from some 100 respondents to the central bank’s weekly survey fell to 2.24% growth this year from 2.28% last week.
For next year, they maintained their outlook at 2.60%. HSBC said that in July, growth of business activity at services companies eased, while production at manufacturers fell for the first time since last August.
Slower rises in business activity were linked by panelists to weaker gains in new work, an increasingly fragile economy and national protests, it said. New orders placed at private sector firms in Brazil fell slightly in July.
Growth of new business across the service sector eased, with firms suggesting that demand was maintained but that political problems, tough economic conditions and the protests had all weighed on growth, the survey said.
wsj.com
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