Key facts
- Brazil's services activity declined 0.4% in May compared to April.
- Economists had forecast a 0.1% monthly increase.
- Transport services saw a 1.0% decrease, and other services fell 1.9%.
- Year-on-year, services activity increased by 0.4%.
Services activity in Brazil contracted by 0.4% in May compared to the previous month, falling short of economists' expectations for a 0.1% increase. The downturn was largely attributed to a 1.0% decrease in transport services and a 1.9% drop in other services, reversing gains seen in April.
Despite these declines, professional and administrative services saw a rise of 1.9%, services provided to households edged up 0.2%, and information and communication services remained unchanged. On a year-over-year basis, services activity grew by 0.4%, also below the 0.9% increase anticipated by economists.
According to Suno Research economist Rafael Perez, the data suggests an adjustment in activity at lower levels, reflecting the lagged effects of restrictive monetary policy and a moderation of strong prior growth.