Services sector grows 0.5% in August and has 5th consecutive high | Economy

The volume of services provided in Brazil advanced 0.5% in August, compared to July, show the data released on Thursday (14) by the Brazilian Institute of Geography and Statistics (IBGE). This is the fifth monthly high in a row.

In comparison with August 2020, the growth was 16.7%.

The increase in the month was driven by the increase in accommodation and food services (4.5%) and air transport (7.4%).

Although positive, the rate slowed down for the fourth month in a row — Photo: Economy/g1

As a result, the sector is 4.6% above the pre-pandemic level, reaching the highest level since November 2015.

“Despite the growth, the sector is still 7.1% below the historical record, reached in November 2014,” highlighted the IBGE.

O result came as expected. The median of estimates from 20 financial institutions and consulting firms heard by Valor Data pointed to a growth rate of 0.5% in August. Projections range from stability to high of 2.2%.

Advancement of vaccination and greater mobility

According to the IBGE, the sector’s recovery has been driven by the reduction in the loss of more face-to-face services due to advances in vaccination and increased population mobility.

“The services sector continues its recovery trajectory in August, especially in services considered out-of-person, but also in face-to-face, with the advance of vaccination and the increase in people’s mobility. Since June of last year, the sector has accumulated 14 positive rates and only one negative, registered in March, when some activities considered non-essential were closed by determination of local governments amidst the advance of the second wave of the coronavirus”, highlighted the research manager , Rodrigo Lobo.

Although it is the fifth consecutive positive rate, the magnitude of growth slowed for the fourth month in a row. According to the research manager, “this is due to the high comparison base that was built from June of last year” after the large losses that the sector suffered in the first months of the pandemic.

Record high in 12 months

In the accumulated result for the year, the sector has a high of 11.5% compared to the same period of the previous year. In 12 months, the advance is 5.1% in August – the highest growth rate for 1 year in the historical series of the survey, started in December 2012.

Indicator has risen for the third consecutive month — Photo: Economy/g1

The quarterly moving average reached 1.1% in the quarter ended in August, compared to the level of the previous month, maintaining the upward trajectory since July 2020.

See the result of the subgroups of each major activity:

  • Services provided to families: 4.1%
  • Accommodation and food services: 4.5%
  • Other services provided to families: -0.3%
  • Information and communication services: 1.2%
  • Information and Communication Technology (ICT) Services: 1.2%
  • Telecommunications: 0%
  • Information Technology Services: 2%
  • Audiovisual, publishing and news agency services: 2.1%
  • Professional, administrative and complementary services: -0.4%
  • Technical and professional services: -6.8%
  • Administrative and complementary services: 0.4%
  • Transport, auxiliary services to transport and mail: 1.1%
  • Land transport: -0.1%
  • Waterway transport: -2.3%
  • Air transport: 7.4%
  • Storage, auxiliary services to transport and mail: 1.2%
  • Other services: 1.5%

The increase in the volume of services, observed from July to August, was accompanied by four of the five activities surveyed, with emphasis on information and communication (1.2%), transport (1.1%) and services provided to families (4 ,1%).

Information technology services show the highest growth, operating at a level 32.8% above what was observed in February 2020. This group brings together the development and licensing activities of software, portals and content providers and search tools in the Internet.

Services provided to families had the fifth increase in a row, but still operate 17.4% below the pre-pandemic level of February 2020.

According to the researcher, income is the main limiting factor for the growth of activities of a more in-person nature, linked above all to services provided to families.

The services sector presented, in August 2021, a level of volume of services rendered 4% above what was observed in February 2020 — Photo: Economy/g1

Professional services are down and fall back below the pre-pandemic level

The only drop in the month was in the result of professional, administrative and complementary services, which dropped 0.4% in August, after three consecutive monthly increases. With this negative result, the segment was once again 0.2% below the pre-pandemic level, joining the services provided to families.

“This 0.4% decline is an accommodation of the pace of growth. The negative pressure came from legal activities, technical activities related to architecture and engineering and electronic payments solutions”, observed the research manager.

Tourist activities had an increase of 4.6% in August, the fourth consecutive positive rate. The tourism indicator, however, is still 20.8% below the level of February last year.

The service sector is what has the greatest weight in the Brazilian economy. He was also the most affected by the pandemic, given the operating restrictions imposed by the measures to contain the advance of Covid-19, especially to establishments with face-to-face service.

Despite the recovery of the services sector, economic activity has lost steam in recent months amid a scenario of high uncertainty due to the escalation of inflation, the worsening of the water crisis and the deterioration of expectations for the performance of the economy in 2022.

Retail trade sales fell 3.1% in August, compared to July, reversing the gains of the previous month. Industrial production, on the other hand, fell by 0.7% in August, in the third consecutive monthly retraction.

Confidence in the services sector retreated in September, after five consecutive months of high, signaling that businessmen turned on the “alert signal” about the more challenging scenario for the coming months.

The expectation of the financial market for economic growth in 2021 is currently at 5.04%, according to the latest Focus survey by the Central Bank, after falling by 4.1% in 2020. For 2022, the average of projections dropped to 1.54 %.

The estimate for the Extended Consumer Price Index (IPCA), the country’s official inflation for the year, rose to 8.59%. For 2022, the projection is at 4.17%.

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While services sector resumes growth, industry and commerce face obstacles

While services sector resumes growth, industry and commerce face obstacles