FX.co ★ Brazil Services PMI Rises but Signals Mild Contraction

The S&P Global Brazil Services PMI saw a slight increase to 49.6 in May 2025, up from 48.9 in April. This points to a continued, albeit slower, decline in activity. New business demand decreased again, resulting in a slight contraction in output. Employment expanded for the seventh month in a row, though at the most subdued rate since November 2024. Both input costs and selling prices experienced sharp rises, yet the inflation rates for these costs eased, with input costs growing at the slowest rate in six months. Optimism improved, reaching its highest level in three months, driven by expectations of stronger demand, increased investment, and greater economic stability. Despite a resilient labor market, the combined services and manufacturing data hints at ongoing weaknesses in Brazil's economic performance for the second quarter.