Services sector remains stable in November after mid-year boom

After a considerable rally in the middle of the year, the Brazilian services sector is starting to lose steam. In November, results were stagnant, marking the second consecutive month without growth according to official data.

“The main pillars that drove dynamism, technology, and cargo transportation, experienced a growth slowdown,” said Luiz Almeida, the manager of the survey carried out by Brazil’s official statistics agency.

Still, he feels it is too early to say that the sector is in a downturn. Services sales remain more than 10 percent above pre-pandemic levels and just 0.5 percent below the all-time record of September 2022.

In the month, communication technology activity fell by 4.1 percent after growing almost 20 percent in the previous four months. Regarding the transportation segment, even with the negative trend of recent months, it saw the greatest increase in services sales in November, growing just 0.3 percent.

Mr. Almeida highlights the behavior of services provided to families, the only segment still below pre-pandemic levels. Activity fell 0.8 percent in November, the second straight month of decline, due to the lower-than-expected performance of the lodging and dining industry.With inflation still persistent, high interest rates making credit more expensive, and work income improving (albeit slowly), many Brazilians continue to cut back on non-essential expenses, eating out and traveling less.