The head of the research highlighted in a report the “growth in the activity of theatrical and musical performances, due to the performances of singer Taylor Swift in the country”
After three consecutive months in the red, the Services showed new growth in November 2023. The 0.4% expansion achieved compared to October was driven by the increase in digital financial transactions, the good performance of discount card companies and loyalty programs and even the singer’s concerts American Taylor Swift in Brazil. The data comes from Monthly service survey published this Tuesday, 16, by Brazilian Institute of Geography and Statistics (IBGE).
“The services sector remains resilient, largely thanks to the overheated labor market. We expect the sector to grow by 0.4% in December and 2.0% in 2023,” predicts Felipe Salles, chief economist at C6 Bank, in the comment.
From October to November, three of the five activities investigated in the IBGE survey recorded progress: other services (3.6%), professional, administrative and complementary services (1.0%) and family services (2.2%).
The largest positive impact on the global average came from other services activity, driven by ancillary financial services, particularly businesses that use digital money, such as credit and debit card machines.
“We make much greater use of digital money than physical money, and this is only going to get bigger and bigger,” explained Rodrigo Lobo, head of research at IBGE. “November was Black Friday,” the researcher added, recalling that the number of digital transactions may have increased due to the period of retail promotions.
The second largest contributor to the expansion of services in November came from professional, administrative and complementary services, particularly from companies that perform legal activities and those that offer discount cards and loyalty programs.
The third positive effect was that of services to families, driven by the increase in food and accommodation, but also by the increase in other services provided to families, given the good performance of the theater and musical shows sector, due to the initiative of the singer Taylor Swift shows in Brazil, Lobo said.
“When a spectacle of this type occurs, it ends up displacing not only the local population where the spectacle will take place,” explains the IBGE researcher. “You end up moving passenger transport, accommodation, you end up moving a whole series of services in addition to the revenues of the company promoting the event. There is a multiplier effect on the increase in revenues for companies providing services when every event of greater magnitude occurs.”
In November, however, the two activities with the greatest weight in the overall service sector recorded losses: transport (-1.0%, fourth consecutive negative rate, accumulating a decline of 5.3% in the period) and transport services. information and communication (-0.1%, after an increase of 0.2% in the previous month).
The decline in transportation, the main negative impact on the global average in November, was driven by a 16.1% decline in air travel, resulting from a 19.12% increase in ticket prices. In information services, the telecommunications sector fell 3.2%, while information technology grew 1.3%.
Growth stops losses
The increase in services in November compared to October 2023 broke a sequence of three consecutive months of declines, when the sector had accumulated a loss of 2.2%. However, IBGE believes the sector continues to operate at a level well above pre-pandemic levels, 10.8% above the level at which it operated in February 2020.
The November result confirmed the industry’s up-and-down trajectory throughout 2023. The businesses examined continue to grow, but at slower rates than post-pandemic, assessed Rodrigo Lobo, of IBGE.
“Despite the expansion of the month, the latest results have highlighted a progressive slowdown in services activity, mainly due to the disappearance or attenuation of the main drivers of growth in the sector present in recent quarters. Among these, the exhaustion of the ripple effect generated by agricultural production, the stabilization of a new normal for families’ leisure and tourism consumption habits, and business investments in information technology with the end of the pandemic. Therefore, the short-term scenario of a tendency towards the loss of aggregate dynamism in the sector, even if heterogeneous between subsectors”, assessed Thiago Xavier, analyst at Tendências Consultoria Integrada.
In the first 11 months of 2023, in the series that discounts seasonal influences, the services sector recorded an expansion in six of them, retreating in five opportunities: January, -3.4%; February, +0.9%; March, +1.1%; April, -1.8%; May +1.5%; June, +0.1%; July, +0.7%; August, -1.4%; September, -0.2%; October, -0.5%; and November, +0.4%.
“Let’s say the services sector no longer has a major driving force, as IT services and freight services had at the end of 2022?”, IBGE’s Lobo explained.
The researcher recalled that the services sector renewed successive records in the post-pandemic period, until the end of 2022, when it reached the peak of the historical series. Currently there is both a high basis for comparison and a normalization of demand.
“In 2023, some factors began to show signs of abating. One of them was the slower growth of IT services,” he recalled, adding that the pandemic led to greater demand for digitalization from companies. “All of this has grown a lot since the pandemic and it looks like, in 2023, things are back to normal. The industry continues to grow most of the time, but not at such a high rate.”
Lobo adds that freight transport is also growing very significantly, both due to the explosion of e-commerce and the good performance of the Brazilian agricultural sector.
“Brazilian agricultural production had a record harvest in 2023, and this harvest is positioned much more relevantly in the first half of the year. So now, in the second half, it loses some of this dynamism in freight transport,” he said. explained.
The researcher says it is difficult to identify how macroeconomic factors, such as exchange rates and interest rates, influence service provision as a whole, as the service sector “is very dynamic and heterogeneous.” One macroeconomic variable can positively influence one service business and negatively influence another, he summarized.
Services accumulate expansion in 2023
From January to November 2023, the services sector accumulated an increase of 2.7% compared to the same period last year. The sector is expected to end 2023 with its third consecutive annual growth. After the 7.8% decline recorded in 2020, caused by the shock of the health crisis, an expansion of 10.9% was recorded in 2021 and 8.3% in 2022.
“Despite the positive data released today (Tuesday 16th), we believe that GDP should have shown a slight contraction in the fourth quarter of 2023 and closed the year at around 3%. For 2024, we forecast growth of 1.5% for Brazil. economy”, concluded Salles, of Bank C6.
Source: Terra
Earl Johnson is a music writer at Gossipify, known for his in-depth analysis and unique perspective on the industry. A graduate of USC with a degree in Music, he brings years of experience and passion to his writing. He covers the latest releases and trends, always on the lookout for the next big thing in music.
-1jeipz0k45s1l.png "Sensitive marches recalls the meeting with Et: “Everyone has seen”")
