Brazilian services activity contracted at the slowest pace in two years in February, contributing to signs that Latin America's economy may soon turn the corner on a deep recession. The Purchasing Managers Index (PMI) for Brazilian services, compiled by research firm Markit, rose to 46.4 in February from 45.1 in January, hitting its highest mark since March 2015.
The index has been below the 50 mark that separates contraction from expansion since February 2015.
Markit's Composite Index, which takes into account manufacturing and services activity, also rose to its highest since March 2015, hitting 46.6 in February after a five-month low of 44.7 in January.
There were bright spots in the latest numbers, which indicate a stabilization might be in sight, Markit economist Pollyana de Lima said in a note. Some firms benefited from improved, although still tepid, demand and inflows of new work increased for the second time in the past two years.
Services account for about 60% of Brazil's gross domestic product. Economists have recently cut their forecasts for Brazil's 2017 growth, expecting only a meager recovery from a two-year-long recession.