Brazil's economy got off to an extremely slow start in the second quarter, figures released showed, with activity in the all-important services sector contracting in April for the first time since September last year.
Combined with last week's snapshot of the manufacturing sector, the IHS Markit purchasing managers index data showed overall economic activity in Brazil almost ground to a standstill in April.
PMI data for the service sector reinforces the message of a cooling economy indicated by manufacturing figures, said Pollyanna De Lima, principal economist at IHS Markit.
”The impact of softening demand conditions was more severe in the service sector ... (where) activity stalled and job shedding picked up to the fastest in 2019 so far”
The services PMI fell to 49.9 in April from 52.7 in March and the composite PMI covering services and manufacturing activity fell to 50.6 from 53.1 in March, reflecting the steepest slowdown in growth since August.
A reading below 50.0 signifies contraction and a reading above denotes expansion.
Brazilian service providers remained optimistic that business activity will increase over the coming year, but confidence slipped to a 10-month low in April. Concerns about government policies, privatization and bankruptcy were among the factors restricting sentiment, IHS Markit said. Services account for around 70% of Brazil's economy.