Service volume rose 1.7% in March, beating expectations and reaching the highest level since 2015

The volume of the services sector grew 1.7% in the February-March period, gaining 2.1% in the past two months.

With this result, the sector recovers from a 1.8% loss in January, reaching the highest level since May 2015 and 7.2% above the pre-pandemic level.

Compared to March of last year, services increased by 11.4%. The data is from the Monthly Service Questionnaire (PMS) and released today (12) by the International Institute for Quality (IBGE).

The data beat Refinitiv’s estimates, which rose 0.7% month over month and 8.5% year over year.

On a monthly basis, the positive result was disseminated across all five activities surveyed, with an emphasis on transportation (2.7%), which increased for the fifth consecutive month.

Among the sectors that have affected the rise in this activity is road freight, especially those related to e-commerce and agribusiness. It is the main means of transporting goods in Brazilian cities, and its use has become more and more evident after the most dangerous months of the epidemic,” explains Director of Research, Rodrigo Lobo.

“Passenger air transport had another effect, not only because of the increase in passenger flow, which generated higher revenues for airlines, but also because it was helped by the drop in airfares observed in March,” he adds. As this month progressed, transportation as a whole was up 18.0% from its pre-pandemic level and reached the highest level in the historical streak, which began in January 2011.

With an expansion of 1.7%, information and communication services recovered a portion of the 4.7% loss accumulated between December 2021 and February of this year. The sector had the second largest impact on the general index. “This growth in March does not cancel out the loss of the past three months, but the sector is still operating above the pre-pandemic level of 10.5%. The biggest impact on the increase in March was revenue growth from companies from portals, content providers, online search tools and software development and licensing and IT consulting,” he analyzes.

The professional, administrative and complementary sectors (1.5%) provided to families (2.4%) and other services (1.6%) complete the list that grew in March. Of the five activities investigated, only the services provided to families did not go beyond the pre-pandemic level. This is due to the scale of the impact this sector has had, Lobo recalls, from the need for social isolation, reduced displacement of people, and the total or partial closure of services deemed nonessential. Among the activities that have affected the growth of the sector are restaurants, hotels and catering services. Even with the progress, services to families are 12.0% lower than the February 2020 level.

From February to March, 24 of the 27 units followed the growth trend. Among them, the largest influences came from São Paulo (2.7%), Minas Gerais (6.4%), the Federal District (10.3%), Santa Catarina (4.2%), Rio Grande do Sul (2.6%) and Rio de Janeiro. (0.8%). The main negative impact came from Mato Grosso (-3.0%).

The research director explains that the current growth of services differs from what was observed at a time when the sector began to recover from the most severe losses of the epidemic.

“Looking back, we have a stronger recovery from June to November 2020 and then a slowdown in the pace of growth that lasted until August last year, when the sector accumulated 9.1%. From September to March 2022, there is a cumulative gain of 3.4%, that is, there is a slowdown Bigger because of the higher comparison base since the beginning of the services recovery,” he says.

Sector accumulated gains of 9.4% in the first quarter

In cumulative terms in the first quarter of the year, the services sector grew by 9.4% and four of the five activities showed positive rates. Among them, the most notable was the transport sector, ancillary transport services and postal services (15.5%), which was mainly affected by the increase in revenue from companies engaged in road freight transport, passenger air transport and collective road passengers.

In the case of services to families, which increased by 30.6% in the quarter, the reason for this increase is the movement of hotels, restaurants and buffet companies. Other developments came from the professional, administrative and complementary sectors (8.0%) and information and communications (3.8%). The other services sector (-2.3%) is the only one that falls in this indicator. This decline is associated with lower revenues for companies involved in recovering plastics, stock brokers, and operating exchanges and regulated over-the-counter markets, among other items.

The other service sector was the first to show a faster recovery from the effects of the pandemic. The other four took longer to recover. That is why it has a higher basis for comparison,” the researcher analyzes.

Compared to March of last year, the positive progress of 11.4% was also followed by four of the five activities. The main impact on overall growth came from the transportation sector (17.2%). Other advances came from services provided to families (62.2%); of professionals, administrators and complementary professionals (9.1%); and Media and Communication (4.0%). In this indicator, too, the other services sector (-4.3%) had a negative rate.

Wolf explains that the two-digit results are justified by the lower comparison rule. “In March 2021, we had the second wave of Covid, when there were decrees to close non-essential services and discourage the exodus of people. So, in March, in the comparison of years, there were very high rates of activities such as air transportation, for example” , explains.

Tourist activities grow 4.5% in March

The tourism activity index grew 4.5% in March after a cumulative decline of 0.9% in the first two months of the year. Even with the increase, the tourism sector is still 6.5% below the pre-pandemic level. He adds: “The indicator comes on the heels of services provided to families and transportation, which also increased in March, affected by the increase in air transportation, restaurants, hotels and catering services.”

The 12 sites surveyed grew compared to February. Among those countries, São Paulo (7.0%), Bahia (8.0%), Santa Catarina (11.8%) and Rio de Janeiro (2.9%) were among those that contributed the most to the increase in the overall index.

(with IBGE News Agency)

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