Brazil's S&P Global Services PMI fell to 49.7 in July 2026 from 51.3 in June, signaling the first contraction in the sector in nine months. New business declined after a brief expansion in June, with the pace of contraction marking the sharpest in ten months. Employment also fell for a second consecutive month. Firms continued to report higher energy, labor, material, and transportation costs, although input cost inflation eased to a four-month low. Output price inflation also slowed to its weakest pace in four months but remained historically elevated. Business confidence improved from June's 11-month low, supported by expectations of stronger client demand after the presidential election and hopes that inflationary pressures will continue to ease.