June signaled a significant growth in services provided to households and a slight contraction in retail, according to data from IGet, an indicator of Santander, conducted in partnership with Getnet, which tracks the performance of Brazilian retail trade. The study signals a slowdown in economic activity in the second quarter of this year and a recovery in economic indexes in Rio Grande do Sul, which suffered strong falls in May due to floods.
The June results of IGet show a rise of 2.8% per month in the services index, maintaining the upward trend observed in the previous month, when it rose 3.0%. Despite continuous monthly growth, interannual performance showed a fall of 1.3%, a slowdown from the annual increase of 3.2% recorded in May.
The June data reveal a mixed dynamic in the different service segments.Hosting and food, for example, registered a high of 2.4%, respectively marking the second consecutive expansion, after an increase of 2.8% in May. On the other hand, the segment of other services, has which include leisure, cultural, beauty salon, fitness center, education, and more, it dropped 0.8% in June, a second consecutive decline, after a decrease of 2.3% in May.
Services provided to households showed a further acceleration in the second quarter of 2024. This growth is seen after a year-end marked by wide variations, which included a sharp drop in January followed by relative stability until April.
Rio Grande do Sul
IGet analyzed retail performance in Rio Grande do Sul, after the flood period, to assess the economic impact the state had. The closed June data show a partial recovery from the falls recorded in May.
In the service sector, IGet it pointed out in RS a contraction of 11.7% compared to June 2023, a level close to that observed in April this year, before the floods.In the expanded retail, there was an increase of 9.2% in June, compared to the same period last year, signaling a significant recovery.
Fall in retail
In retail, June data show a fall of 0.2%, following a trend observed in previous months.The restricted index, which excludes sales of construction materials and automotive parts, showed a decrease of 1.7%, representing the fifth consecutive contraction.
The analysis of the composition of retail activity shows heterogeneous signs. In the restricted index, only the furniture and household appliances sector did not register a decrease in the month. Other personal items continued to fall, although this segment showed high volatility in previous readings.
In the expanded index, the automotive, parts and parts (+8.4%) and building materials (+1.5%) sectors grew, following declines recorded in May.
“These indexes reinforce the expectation of a gradual slowdown in economic activity in the second quarter, but also indicate a potential for recovery in the medium term, especially in regions affected by natural disasters, such as Rio Grande do Sul”, says Fabio Coelho, Vice President of Finance at Getnet.
Gabriel Couto, economist at Santander responsible for IGet, it states that the monthly analysis allows to provide valuable and updated insights on the retail and service sectors in the country. “O IGet uses transaction information in the national acquisition market and aims to expand the information set for analysis of the trajectory of economic activity in Brazil, especially with regard to retail segments and services provided to families. We monitor each month the revenues of a sample of establishments that use, on a recurring basis, Getnet as a means of payment. The sample contains anonymized information from establishments of different sizes and regions, being a very representative selection of these segments in the country”, explains the executive.
