* HSBC Brazil Services PMI at 52.1, from 54.5 in January
* Composite PMI drops to 52.9 from 54.9 in January
By Silvio Cascione
SAO PAULO, March 4 Activity in Brazil's services
sector slowed in February to the weakest pace of growth in four
months, underscoring the view of a modest economic recovery this
year, a private survey showed.
HSBC's Purchasing Managers Index (PMI) for the Brazilian
services sector dropped to 52.1 in February from 54.5 in January
on a seasonally adjusted basis.
Readings above 50.0 indicate expansion and readings below
50.0 signal contraction. Despite being above 50.0 for six
straight months, February's result was the worst since October.
The Composite Output Index, which includes both
the services sector and manufacturing data, also fell to 52.9
from 54.9 in February, HSBC said. Brazil manufacturing PMI was
released last Friday.
"The PMI suggests that the economy is indeed recovering, but
at a cooler pace than the January indicators suggested, which
seems more in line with our forecast of a modest recovery in
2013," said Andre Loes, chief Brazil economist at HSBC.
Brazil's economy grew only 0.9 percent last year, slowing
sharply from a boom in the last decade due to several supply
bottlenecks. Analysts expect the economy to grow around 3
percent this year following a barrage of stimulus measures by
President Dilma Rousseff, according to a Reuters poll.
The services sector has been one of Brazil's few growth
engines, underpinned by record-low unemployment and robust
demand from low to middle-income families.
The HSBC Services PMI survey showed the sixth consecutive
monthly increase in the number of new businesses, with most
companies expecting a rise in activity in the next 12 months.
However, the report showed job losses for the first time
since August, with five of the six sectors surveyed reporting
some job cuts, according to HSBC.
Prices charged by services companies rose slightly in
February on higher input costs. Services prices have risen more
than 8 percent on an annual basis, above the 6.5 percent ceiling
of the target range followed by the central bank, according to
the benchmark IPCA price index.