* HSBC Brazil Services PMI rises to 52.8 in September
* Composite PMI up to 52.2 last month
* Hiring resumes, but limited to a few companies
By Silvio Cascione
SAO PAULO, Oct 3 Activity in Brazil's services
sector rose in September, easing concerns over the country's
main growth engine after two months of contraction, a private
survey showed on Wednesday.
HSBC's Purchasing Managers Index (PMI) for the Brazilian
services sector rose to 52.8 in September on a seasonally
adjusted basis, above the 50 mark that divides
expansion from contraction.
Combined with a slight improvement in a manufacturing index
released on Monday, the services data lifted the
HSBC Brazil Composite Output Index to its highest
level since April --52.2, up from 48.6 in August.
Both indicators suggest the world's sixth-largest economy is
poised to accelerate, leaving behind one year of stagnation
after aggressive stimuli by President Dilma Rousseff.
Years of fast growth lifted more than 30 million Brazilians
out of poverty in the past decade, fostering demand for a wide
range of services such as banking and telecommunications. That
helped Brazil avert a recession in the past year, as
manufacturers struggled with weak global demand and high costs.
"The rebound of the services PMI provides further evidence
that the recovery of economic activity we were expecting for the
second half of the year appears to be materializing," said Andre
Loes, chief economist in Brazil for HSBC.
Brazil's Services PMI had stayed at 48.1 in August, its
lowest level since May 2009. Loes said that such a poor
performance was a "cause of discomfort."
Brazil is expected to grow just 1.6 percent this year, the
slowest since 2009 in the aftermath of the global credit crisis.
In 2013, it is expected to expand by 4 percent, after nine
interest rate cuts in a row and a string of tax breaks and other
stimulus measures, a central bank poll showed.
Still, the Services PMI report showed growth was limited to
a few companies, underlining that the pace of expansion in Latin
America's largest economy is still very modest.
Around 18 percent of the survey respondents report higher
business activity on stronger demand, said Markit, which
compiled the data for HSBC. Also, only around 5 percent of
service providers signaled job creation in September, whereas
the vast majority, 92 percent, reported no change in hiring.
Business sentiment over the year ahead remained positive,
but eroded to its lowest level in 20 months.
The main growth drivers in coming months, according to the
survey respondents, will be increasing demand, both locally and
abroad, projects following municipal elections this month, and
preparations for the 2014 Soccer World Cup.
Inflation of input costs cooled down to its slowest pace
since November 2011. That rise, albeit weaker, was passed
through prices charged to consumers, the poll suggested.