Services sector fell by 1.2% in October in Brazil

The services sector in Brazil started the fourth quarter in the red. In October, it registered a 1.2% drop in volume compared to September, informed this Tuesday (14) the IBGE (Brazilian Institute of Geography and Statistics).

The segment involves a wide variety of businesses, from bars and restaurants to financial, technology and educational institutions. It is also the country’s main employer.​

Even with the result of October, the service sector was still above the pre-pandemic. The distance in relation to February 2020 is 2.1%.

In comparison with October 2020, the services segment grew 7.5%, according to the IBGE.

In the year, the sector accumulates an increase of 11%. In a longer period of 12 months, the advance was 8.2%.

During the pandemic, the provision of diverse services suffered a shock. The impact occurred because the sector gathers activities dependent on the movement of customers, which was reduced by restrictions to contain Covid-19. Hotels, bars, restaurants and events are part of the list of impacted businesses.

What eased the fall generated by the coronavirus was the advancement of technology-related services. These activities had heated demand during the period of social isolation.

With the boost of vaccination against Covid-19 and the reopening of the economy, face-to-face services are betting on an improvement in business by the end of the year.

The recovery, on the other hand, is threatened by the scenario of escalating inflation, higher interest rates and difficulties in the labor market. Together, these factors affect the purchasing power of families.

Before disclosing the performance of services, the IBGE presented two other sector indicators for October: industrial production and retail sales. Both were in red.

Factory output dropped 0.6% in October, the fifth consecutive low. Commerce shrank 0.1% in the same month, the third retreat in a row.