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Brazil PMI August 2023

Brazil: Services sector conditions improve in August

The S&P Global Services Purchasing Managers’ Index (PMI) rose to 50.6 in August, up from the prior month’s 50.2. As such, the index moved further above the 50.0 no-change threshold, signaling a stronger improvement in services sector operating conditions compared to the previous month.

August’s upturn chiefly reflected new orders expanding at a quicker rate than in the prior month. This, coupled with contracts in the pipeline and improved sales expectations for the year ahead, prompted firms to onboard staff, with the job creation rate accelerating from July.

Turning to prices, while input cost inflation was among the weakest in the past three years, it accelerated in August from July due to higher energy, fuel, water and insurance prices, as well as rising wage costs and exchange rate movements. Still, selling prices rose at the slowest pace since November 2020. Lastly, firms’ sentiment rose to a 10-month high in August due to the kickoff of the Central Bank’s loosening monetary policy cycle and expectations of higher sales in the coming year.

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