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Brazil services sector grows at fastest pace in 8 months-PMI
January 4, 2013 / 12:00 PM / 5 years ago

Brazil services sector grows at fastest pace in 8 months-PMI

* HSBC Brazil Services PMI at 53.5 in December

* Composite PMI increases to 53.2 from 53.0 in Nov

By Asher Levine

SAO PAULO, Jan 4 (Reuters) - Activity in Brazil’s services sector grew in December at the fastest pace in eight months, a private survey showed on Friday, adding to signs of a gradual recovery in Latin America’s largest economy.

HSBC’s Purchasing Managers Index (PMI) for the Brazilian services sector rose to 53.5 in December from 52.5 in November on a seasonally adjusted basis. It was the fourth straight month the index stood above the 50 mark that divides expansion from contraction.

The Composite Output Index accelerated to 53.2 from 53.0 in November, HSBC said. The composite index includes both the services sector and manufacturing data, which was released on Wednesday.

The services sector, supported by the rise of around 30 million people into the middle class over the past decade, used to be one of Brazil’s main growth engines, though it disappointed in the third quarter due to weaker activity in the financial sector.

December’s PMI numbers show incoming new work in the service sector increased for the fourth straight month, however, suggesting a stronger contribution to GDP growth in the final three months of 2012.

With December’s results, the Brazil Services PMI moved from an average of 49.9 in the third quarter to 52.1 in the fourth quarter, a move that “reinforces expectations that the economy may be finally gaining some momentum at the end the year,” said Andre Loes, chief Brazil economist at HSBC.

The PMI report showed the fourth straight month of job creation in the services sector in December, though at a slower pace than November.

Optimism over the outlook for the next 12 months eased to a three-month low, added Markit, which compiled the data for HSBC.

Input prices rose at the fastest pace in five months, though just a small part of the rising costs was passed on to clients, with prices charged by companies increasing at the slowest pace since January.

Companies also reported a small decline in backlogs of work for the second straight month.

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