Brazil services PMI plunges to all-time low 34.5 in March - IHS Markit


BRASILIA, April 3 (Reuters) - Brazil's economy experienced an unprecedented crash in March, a survey of purchasing managers' activity showed on Friday, as the shutdown of much of national business and civic life to combat the spread of coronavirus took its toll.

IHS Markit's Brazil services purchasing managers index (PMI) plunged to 34.5 and the composite PMI encompassing manufacturing activity tumbled to 37.6, both the lowest levels since the surveys were initiated 13 years ago.

A reading above 50.0 marks expansion in activity, while a reading below signifies contraction.

The figures back up the growing consensus view that Latin America's largest economy will fall into recession and contract sharply over the calendar year, with some economists predicting one of the worst economic crashes in decades.

"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," said Tim Moore, economics director at IHS Markit.

"The reduction in service sector activity was the fastest since the survey began 13 years ago, with the rate of decline far in excess of that reported by manufacturing companies in March," he said.

Activity in Brazil's services sector, which accounts for around two thirds of the economy, was already slowing even before the coronavirus shock. The February services PMI was 50.4, signaling the slowest growth in eight months.

The slump in Brazil's manufacturing sector last month was not as dramatic, PMI figures showed on Tuesday.

Among other notable PMI survey findings for March, the outlook for new business in the services sector was the bleakest since the survey began in 2007, with the new business index plunging to 33.0 from 52.8.

Business expectations were the weakest since the survey began in March 2007, with respondents predicting the domestic economy will take a long time to recover. The business expectations index collapsed to 44.8, the first time ever below 50.0.

The new export orders index crashed to 19.3, the lowest since this sub-index was launched in 2014, while the employment index's fall to 40.9 showed companies were shedding jobs at the fastest pace since October 2016, IHS Markit said.

(Reporting by Jamie McGeever Editing by Chizu Nomiyama)

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