Confidence in the Brazilian service sector fell in October and was at its lowest level since June, with the sector showing signs of deceleration, according to data released this Friday (28) by the FGV (Fundação Getulio Vargas).
In the month, the ICS (Services Confidence Index) dropped 2.6 points and went to 99.1 points, returning to below 100 points after three months above the level considered neutral.
The result was influenced by the worsening of both the companies’ assessment of the current situation and expectations in the coming months.
The ISA-S (Current Situation Index), an indicator of the perception of the present moment of the service sector, dropped 1.8 points, to 100 points. On the other hand, the IE-S (Expectations Index), which reflects the perspectives for the coming months, interrupted seven consecutive months of highs and dropped 3.5 points, to 98.2 points.
“The sector seems to be starting to show signs of slowing down, projecting a reduction in demand in the coming months, mainly in professional and information and communication services, and in the future trend of business”, explained FGV economist Ibre Rodolpho Tobler in a note.
“The coming months should be crucial to confirm the direction of the entire sector considering the challenging macroeconomic scenario and the expectation of a weaker economy at the turn of 2023”, he added.
In August, the most recent data released by the IBGE, the volume of services increased by 0.7% compared to July, a result that was better than the expectation in a Reuters survey of a gain of 0.2%.
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