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Brazil PMI July 2023

Brazil: Services sector conditions improve only marginally in July

The S&P Global Services Purchasing Managers’ Index (PMI) dropped markedly to a four-month low of 50.2 in July, down from June’s 53.3. As such, the index moved closer to, but remained marginally above, the 50.0 no-change threshold, signaling a marginal improvement in services sector operating conditions compared to the previous month.

July’s sharp moderation was chiefly due to output expanding at the weakest rate in five months. Additionally, new business rose at the softest pace since March amid slower demand. Similarly, the job creation rate also eased to a four-month low. Meanwhile, outstanding business volumes slipped for a fourteenth consecutive month.

Turning to prices, cost inflation eased to one of the weakest rates in three years; still, higher prices for food, fuel and wages continued to drive up operating costs. This, coupled with retreating demand, capped the increase in output charges, which rose at the slowest pace in 32 months. Lastly, business sentiment dropped to a 26-month low; the country’s political and economic challenges concerned firms.

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