According to British data broker IHS Markit, Brazil’s services sector has experienced the worst drop in activity since the company started polling the country in 2007. Brazil’s Business Activity Index fell 16 points since February, hitting 34.5 points in March. A reading below 50 denotes economic contraction.
Though the country has also registered a drop in industrial production, IHS Markit sees the plunge in the services sector as the main reason for the overall business decline in Brazil. Both the closure of businesses and the decrease in demand due to Covid-19 have contributed to that, according to the company.
“Business closures, canceled orders and shrinking customer demand amid the Covid-19 public health emergency have swiftly translated into a rapid drop in service sector output,” reads the report, released by IHS Markit this Friday.