FX.co ★ Brazil Services Activity Contracts for 3rd Month

The S&P Global Brazil Services PMI declined to 49.3 in June 2025, down from 49.6 in May, indicating a third consecutive month of contraction in the country's services sector. This trend reflects ongoing adverse demand conditions and significant cost pressures. This period also marked the sector's weakest quarterly performance since the second quarter of 2021. For the third consecutive month, new orders saw a decline, which helped to somewhat moderate the inflation of output prices. Nevertheless, net employment continued its upward trajectory for the eighth consecutive month. Conversely, there was a slight acceleration in the increase of input costs, particularly for cleaning products, construction materials, labor, food, fuel, and utility bills, such as electricity and water. Moreover, the overall positive sentiment regarding the sector dropped to its lowest level in three months, attributed to intense competition, elevated interest rates, and concerns over revenue. Some respondents also expressed apprehension over the potential economic impact of political uncertainty associated with upcoming elections.