Brazil’s service sector continued to deteriorate in May amid a further fall in new orders and inflationary pressures, survey results published by S&P Global showed on Wednesday.
The seasonally adjusted S&P Global Brazil Services Business Activity Index rose to 49.6 in May from 48.9 in the previous month. However, any score below 50 indicates contraction.
Output fell at a moderate pace in May, though at a quicker pace than in April due to weaker demand and shortages of new business. New orders also fell for the second straight month.
Meanwhile, employment increased marginally, and companies became more optimistic towards output prospects.
On the price front, input price inflation remained sharp despite easing to a 6-month low. The overall cost inflation was driven by higher costs for food, fuel, material, rent, and stationery items. As a result, selling price inflation remained historically high.
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