Brazil’s services sector grows 2.6% in November, its sixth increase in a row

Brazil’s services sector grows 2.6% in November, its sixth increase in a row

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FILE IMAGE. Customers line up at a Burger King restaurant in Sao Paulo. October 20, 2017. REUTERS / Paulo Whitaker 

By Jamie McGeever

BRASILIA, Jan 13 (Reuters) – Services activity in Brazil advanced in November for the sixth month in a row, more than double what analysts had expected, suggesting that Latin America’s largest economy came in strong at the end of the past year.

The sector expanded at a seasonally adjusted 2.6% for the month, the Brazilian Institute of Geography and Statistics (IBGE) said on Wednesday, more than double the median 1.2% growth rate predicted by economists in a Reuters poll.


The five subsectors surveyed grew in November, although Rodrigo Lobo, director of the IBGE survey, highlighted that some key areas remain under pressure from the pandemic.

“Activities such as restaurants, hotels, family services and transportation (…) are recovering, but the need for social distance means that the sector has not yet returned to pre-pandemic (levels),” he said.


November’s service sector output fell 4.8% from a year earlier, IBGE said, below the 6.2% decline forecast in the Reuters poll and its lowest year-on-year decline since April.


Service production fell 8.3% in the first 11 months of the year and 7.4% in the 12 months to November, compared to the same periods a year earlier, IBGE said.

Activity is accelerating from the historical low in May, growing by 19.2% accumulated in the six months since then, IBGE said. However, it is still 3.2% below the February pre-pandemic peak and plummets 14.1% from the November 2014 series peak.


Services are responsible for about two thirds of the Brazilian economic activity. For months last year, the sector lagged behind industry and manufacturing in the rebound from crisis lows due to the effects of social distance to slow the spread of COVID-19.

However, recent data showed that it is coming back to life, occupying more than 40% of the record 809,000 net new formal jobs created in the economy in October and November, according to data from the Ministry of Economy.


GRAPH (in English): Activity of the services sector in Brazil



(Edited in Spanish by Carlos Serrano)


Ben Oakley
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