However, it remained well below the 50 mark that separates contraction from expansion, extending a negative streak that started in February 2015. Activity, new business and staffing levels all fell in December. Markit's Composite Index, which takes into account manufacturing and services activity, also rose slightly to 45.3 in December from 45.2 in November.
"There was little evidence from survey respondents that the sector will turn the corner anytime soon," Markit economist Pollyana de Lima said. Input costs rose, but weak client demand discouraged services firms from raising their prices as well, Markit said. The degree of optimism among purchasing managers remained unchanged at the lowest since August. Services account for about 60 percent of Brazil's gross domestic product. Economists have cut their forecasts for Brazil's 2017 growth, expecting only a meager recovery from a two-year-long recession.