Brazil's service sector experienced a deceleration in growth in August, primarily due to escalating inflationary pressures, according to a survey released by S&P Global on Wednesday.
The seasonally adjusted S&P Global Brazil Services Business Activity Index decreased to 54.2 in August from 56.4 in July, though a score above 50 still indicates growth.
New business growth, while solid, was the slowest it has been this year.
In August, Brazilian service providers encountered increased business costs, largely attributed to currency devaluation, market inflation, droughts, and the aftermath of flooding in Rio Grande do Sul.
The rate of input price inflation reached a 25-month high, and selling price inflation was at its highest in nearly 18 months.
On the positive side, employment growth was robust, marking the highest rate in three months, fueled by positive sales trends and optimistic growth forecasts.
The composite output index dropped from a 25-month high of 56.0 in July to 52.9 in August, with the slowdown in the private sector economy attributed to a renewed decline in factory production.
Separate official data indicated a 1.4 percent decline in the country's industrial production in August, following a strong 4.3 percent recovery in June.
The primary negative factors affecting industrial production included food products, coke, petroleum products, biofuels, extractive industries, and pulp, paper, and paper products, according to preliminary data from the statistical office IBGE.
