BRASILIA, Oct 3 (Reuters) - Services activity in Brazil tumbled for a second straight month in September as demand flagged ahead of the most hard-to-predict presidential election in decades, a private survey showed on Wednesday.
The Purchasing Managers’ Index compiled by research firm Markit fell to 46.4 from 46.8 in August, the lowest since February 2017. Figures below 50 represent contraction in activity.
Uncertainty around next week’s vote, coupled with an underwhelming economic recovery and client defaults, weighed on demand for new business, snapping an eight-month string of gains and driving firms to cut payrolls.
Input cost inflation continued to accelerate, forcing companies to hike prices for a fourth straight month.
“Things went from bad to worse for the service sector in September,” Markit economist Phil Smith said. “The survey highlighted the continuation of a challenging operating environment for business, with reports of political tensions weighing on demand and clients in default.”
Markit’s composite PMI index, which was also influenced by a contraction in manufacturing activity, fell to 47.3 from 47.8.
Reporting by Bruno Federowski, Editing by Chizu Nomiyama