Brazil’s service sector improves ahead of Rio Olympics

The Brazilian service sector showed signs of improvement during the month of July, ahead of the 2016 Olympic Games to be staged in Rio de Janeiro, which has helped to boost demand for hotel and restaurants.

The Purchasing Managers Index (PMI) for Brazilian services, compiled by research firm Markit, rose on a seasonally adjusted basis to 45.6 in July from 41.4 in June. The 50 mark of the index separates contraction from expansion.

Further, the slower contraction in both services and manufacturing activity boosted Markit's Composite Index to 46.4 in July from 42.3 in June. The venue is expected to attract almost half a million spectators to the first time-hosted Olympics in South America, scheduled to kick off from Friday.

Further, July's pace of contraction in new business volumes for service providers remained the weakest among the 17 consecutive monthly falls. The sector continued to shed jobs in July, but at slower pace than in previous months.

Meanwhile, for a country that is struggling the odds of the worst recession across all generations, the hosting of the world’s largest games will provide a platform that will likely render some economic relief to the nation; however, it might even prove actually costly to the host city Rio de Janeiro, Reuters reported, citing, analyst’s expectations.