Brazil: Services output disappointed in May

Research evidence excerpt

Brazil: Services output disappointed in May

J P M O R G A N Latin America Economic Research

15 July 2026

Brazil

Services output disappointed in May

EM, Economic and Policy Research

Vinicius Moreira

(55-11) 4950-3195

vinicius.moreira@jpmorgan.com

Mirella Sampaio

• Services output declined in May, remaining around end-2025 levels (55-11)mirella.sampaio@jpmorgan.com4950-3289

• The good news is that services to families — an important input into private Gustavo Ribeiro

consumption — rose again (55-11) 4950-4059

• Overall, today’s result remains consistent with our view that GDP growth is gustavo.ribeiro@jpmorgan.comBanco J.P. Morgan S.A.

decelerating to 2% q/q saar in 2Q

While retail sales are expected to rebound tomorrow after April’s sharp decline,

coincident indicators suggest that today’s services print may mark the start of a

softer run of activity readings through the end of 2Q. May services output fell 0.4%

m/m sa, weaker than our expectation (+0.2%) and the consensus (−0.1%). This

suggests that, despite volatility and some upward revisions to recent data, services

output is still running at around the levels seen at the start of the year (Figures 1–3).

The details were mixed. The weakness was concentrated in transportation services,

which declined 1.0%, reflecting another weak showing in air transport, and in other

services, which fell 1.9%. More encouragingly, professional and administrative

services rose 1.9%, and services to families — an important input into consumption

— grew 0.2% after expanding 1.4% in April (Table 1). While headline services

output is tracking broadly stable growth in 2Q after falling 2% q/q saar in 1Q,

services to families is tracking an acceleration from roughly 2% to around 4% q/q

saar in 2Q (Figures 4 and 5).