FX.co ★ Brazil Services PMI Falls into Contraction

Brazil’s S&P Global Services PMI slipped to 49.7 in July 2026 from 51.3 in June, indicating the first downturn in the sector in nine months. New business declined following a brief expansion in June, with the rate of contraction the steepest in ten months. Employment also dropped for the second month in a row. Firms continued to face higher energy, labor, material, and transportation costs, though input cost inflation moderated to a four-month low. Output price inflation likewise eased to its weakest pace in four months, but remained historically elevated. Business confidence improved from June’s 11-month low, buoyed by expectations of stronger client demand after the presidential election and hopes that inflationary pressures will keep easing.