IBGE: Services fall in February after 3 months of increases – 04/12/2024 – Market

The volume of services in Brazil contracted again in February, interrupting three consecutive months of gains and frustrating expectations.

In February, there was a decline in the volume of services of 0.9% compared to the previous month, according to data released this Friday (12) by IBGE (Brazilian Institute of Geography and Statistics).

The result comes after the sector accumulated an expansion of 1.5% in the previous three months and was well below the expectation in a Reuters survey of an increase of 0.2%.

Thus, the volume of services is 11.6% above the pre-pandemic level, in February 2020, and 1.9% below the highest point in the historical series, in December 2022.

Compared to the same month last year, volume increased by 2.5%, against expectations of 4.5%.

The expansion of the services sector in recent months reflects the heated job market with an increase in the wage bill, as well as inflation. However, some slowdown is expected this year, following the slowdown in economic activity.

The performance of services and inflation in the sector have been a point of attention for the Central Bank, which continues its cycle of monetary easing, with the basic interest rate currently at 10.75%.

IBGE data show that in February four of the five activities surveyed had a drop in volume. According to Luiz Almeida, research analyst at IBGE, this is the result of a compensation movement after months of increases.

“It is a discontinuation of previous gains. As we observed, for example, in the activity of professionals, administrative and complementary”, he said.

The group fell 1.9% in February after an increase of 1.0% in January, mainly impacted by the payment of court orders, which influenced legal activities, according to IBGE

“As there was no such revenue in February, this returns to the previous level”, explained Almeida.

Another highlight of the month was the 1.5% decline in volume in the information and communication sector, which offset part of the 3.6% gain in the last four months.

“In this case, the main influences came from portals, content providers and other information services on the Internet, and from publishing integrated with book printing, which, with the end of preparation for the start of the school year, showed a cooling of the market “, explained Almeida.

The other declines were recorded by transport (-0.9%) and other services (-1.0%). Only services provided to families showed gains, of 0.4%, which however does not recover the 2.9% drop in January.

The tourist activities index, in turn, fell 0.8% in February compared to the previous month, marking the second consecutive setback, with an accumulated loss of 1.8%. The segment is 2.2% above the pre-pandemic level and 4.3% below the highest point in the series, reached in February 2014.