BRASILIA, July 5 (Reuters) – Private sector business activity in Brazil revived in June, a survey of purchasing managers showed on Monday, driven by the fastest pace of growth in the dominant services sector since more than eight years.
New orders, new exports and employment in the services sector led the way, indicating that Latin America’s largest economy should see solid growth in the second half of the year.
IHS Markit’s Brazilian services PMI jumped to 53.9 from 48.3 in May, the fastest expansion since January 2013. This helped pull the composite PMI, including manufacturing, to 54.6 in June from 49.2, the highest since October.
A PMI reading above 50.0 signals expansion, and a reading below shows contraction. Services represent around 70% of all economic activity in Brazil.
According to survey participants, the recovery was driven by the easing of some COVID-19 related restrictions, advances in vaccines and the growth of new businesses.
“Services businesses recorded the largest monthly increase in business activity in nearly eight-and-a-half years, and there was a recovery in employment, with many businesses seeking to replace workers who had been made redundant earlier. early in the year,” said Pollyanna De Lima, an economist. Associate Director at IHS Markit.
The services employment index rose from 48.9 to 52.0, the highest since January last year. The composite index of employment in industry and services rose from 49.9 to 52.9, the highest since February 2012.
The services new orders index rose, but inflationary pressures also rose, with the price charged index hitting the third highest level since data collection began in March 2007, IHS Markit said. (Reporting by Jamie McGeever; Editing by Chizu Nomiyama and Andrea Ricci)