Service sector is below expectations and declines 0.1% in January

The volume of the service sector, the country’s largest employer, dropped 0.1% in January, compared to December, reported this Wednesday (16) the IBGE (Brazilian Institute of Geography and Statistics).

The result was below financial market expectations. Analysts consulted by the Bloomberg agency projected an increase of 0.3%.

The retraction came after the segment accumulated a gain of 4.7% in the last two months of last year.

Even with the setback at the start of 2022, the service sector remains at a higher level than that recorded in the pre-pandemic. It is 7% up from February 2020, before the health crisis. It is also at the highest level since August 2015, says the IBGE.

The segment involves a wide variety of businesses: from bars and restaurants to financial, technology and educational institutions.

“In this recovery process that the service sector has been experiencing since June 2020, there is an absolute predominance of positive rates: there are 15 positive rates against five negative ones, that is, a wide basis for comparison, which means that, from time to time, , the sector shows some type of accommodation”, pondered Rodrigo Lobo, manager of the IBGE survey.

The decrease of 0.1% in January was accompanied by three of the five activities investigated. The highlight came from the losses of information and communication services (-4.7%), which fell for the second consecutive month.

The strong comparison base helps to explain the fall in January, according to Lobo. With social isolation, this branch grew during the pandemic. Information and communication activity is 7.3% above pre-coronavirus.

The other declines in January came from services provided to families (-1.4%) and other services (-1.1%). The first interrupted nine consecutive positive rates, with 60% growth in the period. The second eliminated a small part of the advance registered in the last two months of 2021 (5.7%).

Services provided to families were the most affected by Covid-19, because they bring together companies that depend on the movement of people and direct contact with customers. Bars, restaurants and hotels are part of the business list.

With the reopening of the economy and the advance of vaccination, the services provided to families have improved in the country, but are still 13.2% below the pre-crisis.

In January of this year, Brazil had an increase in cases of coronavirus with the impact of the ômicron variant. However, there were no such strong restrictions on the movement of people, recalled Lobo.

Therefore, the researcher understands that the decline in services provided to families may be more associated with conjunctural factors, such as rising inflation and weakened income.

“I tend to believe that it was something more conjunctural, more related to price increases or lower disposable income”, evaluated Lobo.

The branch of other services, such as those provided to families, is also below the pre-crisis level. It is at a level 0.6% lower than in February 2020.

According to the IBGE, the branches of transport (1.4%) and professional, administrative and complementary services (0.6%) were the only ones that grew in January 2022.

Both recorded the third positive rate in a row. In this period, they increased by 6.6% and 5.3%, respectively.

Transport is 13.1% above pre-pandemic. Professional and administrative services exceed the pre-crisis level by 1.4%.

Increase of 9.5% compared to January 2021

In the series without seasonal adjustment, compared to January 2021, the volume of the services sector marked the 11th consecutive positive rate, according to the IBGE. The advance was 9.5% in the first month of 2022.

Market analysts had projected a smaller increase of 9.3%, according to the Bloomberg agency.

In the 12-month period, the volume of services grew by 12.2% until January. It is the highest rate in the historical series, which began in 2011. According to the IBGE, the comparison base weakened by Covid-19 helps to explain the robust advance.

Before releasing the performance of services, the institute presented two other sectorial indicators for January 2022. Industrial production fell 2.4% compared to December, while retail sales rose 0.8%.

Both factory production and trade remain below pre-pandemic levels. That is, they have not yet recovered all the losses recorded in the health crisis.