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Brazil services slip further in November as confidence fizzles: PMI

Reuters

BRASILIA, (Reuters) - Brazil's services activity continued to fall at a fast pace in November, a survey showed on Monday, underscoring the view that a severe economic recession extended into the fourth quarter.

The Purchasing Managers Index (PMI) for Brazilian services, compiled by research firm Markit, rose on a seasonally adjusted basis to 44.4 in November from 43.9 in October.

Still, it remained well below the 50 mark that separates contraction from expansion, extending a negative streak that started in February 2015.

Confidence over the outlook for the next 12 months among service providers remained positive, but the degree of optimism fell to a three-month low, Markit said.

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Markit's Composite Index <BRPMCP=ECI>, which takes into account manufacturing and services activity, also rose slightly to 45.3 in November from 44.9 in October.

"Composite PMI data for the fourth quarter so far point towards a further contraction of gross domestic product, continuing the downturn of Brazil's economy that began in the first quarter of 2015,” Markit economist Pollyana de Lima said.

Services activity fell sharply, while backlogs of work dropped at the quickest rate in the survey history, Markit said. Staff levels were also down.

Services account for about 60 percent of Brazil's gross domestic product. Economists have cut their forecasts for Brazil's 2017 growth, expecting only a meager recovery from a two-year-long recession.

(Reporting by Silvio Cascione, Editing by Chizu Nomiyama)