Brazilian services sector improves again in May

Brazil’s services sector posted 0.9 percent monthly growth in May, the third positive result in four months. The sector is now 8.4 percent above pre-pandemic levels. Services advanced 9.2 percent year-on-year, continuing a positive streak of 15 months.

The May result was pulled up mainly by positive numbers in the ICT and cargo transportation segments. The latter, especially with regards to road transportation, met the demands of e-commerce and agribusiness and has also been important for the industrial sector, notably capital and intermediate goods, which are categories already operating above pre-pandemic levels. 

With 1.8 percent growth, cargo transport reached its peak in the historical series, which began in January 2011.

All five segments surveyed saw a rise in May. Per Rodrigo Lobo, the survey’s manager at the national statistics institute IBGE, this growth spread across all activities in the services sector reflects the effects left by the pandemic.

“Before 2020, it was much rarer to see activities growing simultaneously. This is related to the low base of comparison because of the effects of social isolation measures, especially on in-person services. Since then, with the reduction of restrictions, these activities are coming back at a faster pace,” Mr. Lobo said.The recovery of the services sector was the main driver for the 1 percent GDP growth in Q1. Services make up around 70 percent of the Brazilian economy.