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Brazil PMI December 2023

Brazil: Services PMI falls in December

The S&P Global Services Purchasing Managers’ Index (PMI) fell to a three-month low of 50.5 in December from November’s 51.2. The index moved closer to, but remained above, the 50.0 no-change mark, pointing to a continued, albeit moderating, improvement in services sector operating conditions from the previous month.

December’s downtick came on the back of both new business and output growth slowing form November. Meanwhile, employment rose only marginally in the month due to a steep depletion of backlogs.

Turning to prices, input cost inflation receded to a near three-and-a-half-year low in December, but higher energy, food, fuel and water prices continued to drive up costs. That said, selling charges rose at the sharpest pace in seven months. Lastly, firms were the most optimistic in four months regarding the year ahead; expectations of improving economic conditions and price stability supported sentiment.

Reflecting on the decision to raise prices despite receding input cost inflation, S&P Global’s economics associate director Pollyanna De Lima explained:

“Considering the fragile demand environment, services sales—and with that activity—could be adversely impacted in the near-term.”

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