2026.08.0513:00:00UTC+00Brazil’s Services Activity Slips into Contraction as S&P Global PMI Falls Below 50 in July

Brazil’s services sector moved back into contraction territory in July, as the S&P Global Services Purchasing Managers’ Index (PMI) fell to 49.7, according to data updated on 5 August 2026. The reading dropped from 51.3 in June 2026, when the index had signaled modest expansion.

The decline below the 50-point threshold, which separates growth from contraction, suggests a weakening in business conditions across Brazil’s services industry after a brief period of improvement in June. The July figure indicates that overall activity levels softened, raising concerns that momentum in the broader economy could be losing strength in the third quarter.

While no additional breakdown was provided, the shift from expansion to contraction within a single month underscores the fragility of demand in Brazil’s services segment, a key driver of employment and domestic output. Market participants and policymakers are likely to watch upcoming releases closely to assess whether July’s downturn marks the start of a more persistent slowdown or a temporary setback.