Brazil's service sector activity expanded at the weakest pace in five months in July, though still remained strong overall, survey data from S&P Global showed on Wednesday.
The seasonally adjusted services business activity index dropped to 55.8 in July from 60.8 in June. However, a reading above 50 indicates expansion in the sector.
Even though business activity and sales rose at a slower pace, expansion rates were much higher than their long-run averages, the survey said.
New order growth slowed to a 5-month low in July amid elevated price pressures.
Inflationary pressures in July were largely driven by higher prices of food, fuel and utility prices and the US dollar strength. However, the rate of cost inflation softened to a five-month low amid a reduction in fuel taxes.
Concurrently, charge inflation moderated to the slowest since April.
Looking ahead, services companies remained strongly upbeat about the outlook, with over two-thirds of panelists predicting higher output levels in the next year.
"Service providers again signaled a robust rate of hiring activity, but a sharp and faster drop in outstanding business indicates that job creation will likely soften further unless new business regains growth momentum," Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said.
The composite PMI, which combines manufacturing and services, fell to 55.3 in July from 59.4 in June.
