FX.co ★ Brazil Services Growth Eases In November

Brazil's service sector experienced continued growth in November, albeit at a decelerated pace, as a result of a slower increase in new orders, according to results from a survey conducted by S&P Global released on Wednesday.

The seasonally adjusted S&P Global Brazil Services Business Activity Index fell to 53.6 in November from 56.2 in October. A reading above 50 still signifies expansion.

Throughout November, demand conditions improved at a reduced pace, which somewhat limited the expansion of new business and output, the survey indicated.

Input costs climbed significantly due to higher prices for chemicals, food, fuel, and stationery. Nonetheless, the rate of cost inflation dropped to its lowest in five months. Similarly, while selling price inflation remained high, it was the weakest observed since July.

Due to these cost pressures, firms refrained from increasing their workforce, resulting in employment levels remaining stable compared to October.

There was a recovery in business confidence in November, with panelists largely attributing this to expectations of sustained favorable client demand and strengthening economic conditions.

The composite output index decreased to 53.5 in November from 55.9 in October, reflecting robust yet slower growth in Brazil's private sector.

In other areas, Brazil's industrial production shrank by 0.2 percent on a monthly basis in October, after a 1.0 percent increase in September. This marked the first decline in three months. However, annual growth accelerated to 5.8 percent from 3.4 percent, according to the statistical office IBGE.