The Brazilian services sector recorded a higher-than-expected increase in volumes in September thanks to the push of Rock in Rio, showing resilience at the end of the third quarter by renewing the highest point of the historical series.
In September the volume of services increased by 1.0% compared to August and compared to the same month last year there was a growth of 4.0%.
The monthly data, released this Wednesday by the Brazilian Institute of Geography and Statistics (IBGE), show a recovery in the sector after a decline of 0.3% in August.
The services sector thus reaches the highest point in its series and, according to IBGE, the total volume is 16.4% above the pre-pandemic level.
The results were even better than expectations from a Reuters poll which predicted an increase of 0.7% in the monthly comparison and 3.5% in the annual comparison.
“The Rock in Rio event is one of the main drivers for the 1% increase in services in September. It had a significant weight in the global index that month,” explained Rodrigo Lobo, head of research at IBGE.
“Music shows and events always have a spillover effect on other sectors, such as aviation, hospitality and even bars and restaurants,” he added.
As a result, the third quarter ended with a 1.3% increase in services, the sixth consecutive increase and the strongest since the fourth quarter of 2022.
Services have been a major driver of the economy this year, amid a favorable job market, rising income and credit.
However, just like the economy, it is expected to lose momentum in the second half of the year, due to the increase in the base interest rate promoted by the Central Bank, which has already raised the Selic to 11.25%.
“For the future, we hope that this scenario will continue throughout the year, despite the recent deterioration of the inflationary situation and the consequent need to increase the interest rate,” underlined Igor Cadilhac, economist at PicPay.
The IBGE pointed out that, in September, four of the five businesses showed expansion compared to August. The greatest positive influence on the month’s index was given by professional, administrative and complementary services, with an increase of 1.4%.
The other increases concern information and communication (1.0%); transport (0.7%) and family services (0.4%), activities that include accommodation, food and other types of services. The only decline for the month occurred in other services, by 0.3%.
“Despite the group’s growth, the trend in services provided to families suggests a less intense demand for services”, underlines André Valério, senior economist at Inter, in a note.
In September the tourism activity index grew by 0.5% compared to the previous month and the segment is now 8.1% above the February 2020 level and 0.2% below the series high point, registered February 2020. 2014.
Among the locations surveyed, Rio de Janeiro made the most significant positive contribution, with an increase of 14.9%, thanks to Rock in Rio.
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.
