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Brazil PMI October 2023

Brazil: Services PMI picks up in October

The S&P Global Services Purchasing Managers’ Index (PMI) came in at 51.0 in October, improving from September’s 28-month low of 48.7. As such, the index rose above the 50.0 no-change threshold, signaling an improvement in services sector operating conditions from the previous month.

October’s upturn was driven by a more favorable demand environment: New business expanded at the strongest pace in four months. Consequently, firms onboarded staff—but only at a marginal pace.

Turning to prices, operating costs increased at the fastest rate since June, buoyed by higher energy, food, fuel, insurance, water and labor expenses. Accordingly, selling prices also increased at the sharpest pace in four months—and above their long-run average growth—particularly in the transport, information and communication sector. Lastly, firms became more optimistic in October due to strong demand and expectations of receding price pressures.

Pollyanna De Lima, economics associate director at S&P Global, commented on inflation developments:

“This is a worrying trend as, if sustained, it may urge the central bank to pause interest rate cuts at a time when expenditure and investment could receive a boost from further reductions.”

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