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Brazil PMIs show pandemic hits business activity again in April - IHS Markit

Credit: REUTERS/AMANDA PEROBELLI

Private sector business activity in Brazil shrank in April for the fourth month in a row and at the fastest pace since last June, a purchasing managers' survey showed on Wednesday, as a second wave of the COVID-19 pandemic continued to slam services.

By Jamie McGeever

BRASILIA, May 5 (Reuters) - Private sector business activity in Brazil shrank in April for the fourth month in a row and at the fastest pace since last June, a purchasing managers' survey showed on Wednesday, as a second wave of the COVID-19 pandemic continued to slam services.

IHS Markit's headline Brazil services PMI fell to 42.9 from 44.1 in March, the fastest contraction since July, while the composite PMI including manufacturing fell to 44.5 from 45.1, the lowest since June.

A PMI reading above 50.0 signals expansion, and a reading below shows contraction.

Pollyanna De Lima, economics associate director at IHS Markit, said the decline in services activity was mostly down to stricter social distancing and lockdown restrictions in response to the recent surge in COVID-19 cases.

"The damage to the sector was widespread, with all five monitored categories posting contractions in new work and output," De Lima said.

"Business confidence also faded across all segments as companies became increasingly worried about the escalation of the pandemic and for how long they will have to endure tougher controls," she added.

The services employment index fell to 47.6 from 47.8, marking the fifth month of job losses. November is the only month in the past year where the services employment index has been above 50.0.

The composite employment index across manufacturing and services rose to 48.6 from 48.0, IHS Markit said, but that was still the fourth month in a row of shrinking payrolls.

The services new business and business expectations indexes both fell to the lowest since June, indicating a high degree of caution across the sector.

Inflationary pressures in services eased marginally but was little-changed from March's five-year high, so still one of the highest since the series began in 2007.

(Reporting by Jamie McGeever Editing by Chizu Nomiyama)

((jamie.mcgeever@thomsonreuters.com; +55 (0)11 97189 3169; Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net))

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