2 Minutes Read Reuters, BRASILIA, July 5 – According to a purchasing managers’ poll released on Monday, private sector business activity in Brazil surged back to life in June, fueled by the strongest rate of growth in the dominating services sector in more than eight years. New business orders, exports, and employment all increased in the services sector, indicating that Latin America’s largest economy is on track for strong growth in the second half of the year. The headline from IHS Markit Brazil’s services PMI increased to 53.9 in May from 48.3, the largest increase since January 2013. This boosted the composite PMI, which includes manufacturing, to 54.6 in June, up from 49.2 in May, the highest level since October. A PMI reading of 50.0 or higher indicates expansion, while a reading of 50.0 or lower indicates contraction. In Brazil, services account for over 70% of all economic activity. The increase was attributed to the removal of some COVID-19 restrictions, vaccination progress, and new business growth, according to survey respondents. “Services firms saw the sharpest monthly increase in business activity in nearly eight and a half years, and there was a renewed uptick in employment as many companies sought to replace workers who had been laid off earlier in the year,” said Pollyanna De Lima, IHS Markit’s economics associate director. The employment index for services increased to 52.0 from 48.9, the highest level since January of previous year. The composite employment index for manufacturing and services increased to 52.9 from 49.9 in February 2012, the highest level since that month. The new business orders index for services increased, but inflationary pressures increased as well, with the prices charged index hitting its third-highest level since data gathering began in March 2007, according to IHS Markit. (Jamie McGeever contributed reporting; Chizu Nomiyama and Andrea Ricci edited the piece.)/n
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