• Highlights

• In 2023, the non-financial services sector comprised 1.7 million active companies and 15.2 million employed individuals, recording R$592.5 billion in salaries, withdrawals, and other compensation.
• The Information and Communication Services segment saw the largest decline in share from 2014 to 2023, with a reduction of 3.6 percentage points (pp). Professional, Administrative, and Supplementary Services grew 2.7 pp and became the most relevant activity in terms of revenue, accounting for 29.2% of the country's total services.
• The services sector employed 15.2 million persons in 2023, the highest number in the time series that began in 2007. Over the past 10 years, there has been an increase of 2.2 million persons (or 17.2%) employed, with growth in all regions of the country.
• The five activities that most employed workers accounted for almost half (47.0%) of the services sector's workforce. They were: Food services; Technical and professional services; Road cargo transportation; Building and landscaping services; and Office and administrative support services.
• In 2023, the services sector paid, on average, 2.3 minimum wages per month. Information and communication services (4.7 minimum wages), Other service activities (3.6 minimum wages), and Transportation, support services for transportation and mailing (2.8 minimum wages) were the segments that paid wages above the sector average.
• Over the past 10 years, market concentration among the eight largest companies in the sector decreased from 9.5% to 6.6%, with a notable decrease in concentration in the Information and Communication Services segment (a 7.9 percentage-point decrease) and an increase in the Other Service Activities segment (an 8.5 percentage-point increase).
• In 2023, the Southeast Region accounted for 64.4% of gross service revenue generated in Brazil and paid compensation above the national average (2.6 minimum wages). The Northeast Region remained the area with the lowest average salary (1.6 minimum wages).
• In 2023, Professional, Administrative, and Supplementary Services was the main type of service provided in 25 of the 27 Federation Units. In the remaining states, Road Transportation, which encompasses both passenger and cargo transportation, prevailed.
• São Paulo accounted for 45.0% of the country's gross service revenue, followed by Rio de Janeiro (10.0%), Minas Gerais (7.8%), Paraná (5.5%), and Rio Grande do Sul (4.7%). Furthermore, São Paulo increased its share by 3.7 percentage points compared to 2014.

In 2023, the non-financial services sector employed 15.2 million persons in 1.7 million active companies, recording R$592.5 billion in salaries, withdrawals, and other compensation, and R$3.2 trillion in net operating revenue. For the third consecutive year, the number of employed personnel reached a record high, and, for the first time, the Professional, Administrative, and Supplementary Services segment led the way in terms of revenue share, with 29.2%. Gross value added reached R$1.9 trillion. Data are from the Annual Survey of Services (PAS), released today (27) by the IBGE.

Conducted since 1998, the PAS reflects the structural characteristics of non-financial service providers in the country. This sector has a high share of the Gross Domestic Product (GDP) and total formal employment, in addition to being characterized by a wide variety of activities, including different capacities for revenue generation, employment, technological intensity, etc.

Seven major segments, encompassing a total of 34 activities, comprise Annual Survey of Services (PAS): Services rendered primarily to families; Information and communication services; Professional, administrative, and complementary services; Transportation, support services for transportation and mailing; Real estate activities; Maintenance and repair services; and Other service activities. At the regional level, the PAS encompasses 13 activities. The survey's time series begins in 2007.

Gross revenue generated by non-financial service providers totaled R$3.4 trillion in 2023. Of this amount, 97.0% was generated exclusively by the core business of services rendered, while the remainder corresponded to revenue from secondary activities, including industrial, construction, and merchandise resale operations.

Net operating revenue (total revenue minus canceled sales, rebates, unconditional discounts, and applicable taxes) from the services sector in 2023 totaled R$3.2 trillion. Among the seven segments analyzed by the survey, Professional, Administrative, and Supplementary Services (29.2%) had the largest share, topping the ranking for the first time.

"The result for Professional, administrative, professional, and complementary services was influenced by the activity of Technical and professional services (services rendered by law, accounting, and architecture firms, etc.), which represented 12.6% of the services sector in 2023. There was a significant increase in participation compared to the pre-COVID-19 pandemic period, with a gain of 2.1 percentage points between 2019 and 2023," explains Marcelo Miranda, manager of IBGE Structural Analysis.

The Transportation, support services for transportation and mailing segment contributed 28.1%, followed by Information and communication services (19.8%), Services rendered primarily to families (11.5%), Other service activities (7.6%), Real estate activities (2.6%), and Maintenance and repair services (1.3%).

Transportation Loses Revenue Share

In 2023, Transportation, support services for transportation and mailing lost its leading position in net operating revenue to the Professional, Administrative, and Supplementary Services segment. Transportation had been topping the list since 2010, but has lost 1.3 percentage points of share from 2014 onward. The Professional, Administrative, and Supplementary Services segment, meanwhile, has grown 2.7 percentage points over the past 10 years.

Between 2014 and 2023, Other Service Activities increased its share of net operating revenue by 2.8 percentage points (pp), reflecting the increased share of Auxiliary Financial Services, Insurance, and Supplementary Pensions, which increased by 2.5 pp.

The Information and Communication Services segment experienced the largest structural change since the beginning of the PAS time series in 2007, reducing its share by 11.4 pp. Considering only the period between 2014 and 2023, the decline was 3.6 pp. The decline in the contribution of the Telecommunications activity (-5.9 pp) was a determining factor in this scenario, reflecting the largest contraction in the services sector in 10 years. Information Technology (4.5 pp), on the other hand, experienced the largest increase in share. Audiovisual services, in turn, decreased their share in the services sector by 1.3 percentage points.

"The positive change in Information Technology activity was not enough to offset the loss seen in Telecommunications over the last 10 years, which can be explained by recent regulatory and behavioral changes, including telephone, Internet, and pay TV companies, among others," observes Mr. Miranda.

With a negative change of 0.2 percentage points between 2014 and 2023, activities representing Services rendered primarily to families remained stable. Food services (63.5%) and Lodging services (14.1%) were the two activities that concentrated the majority of the revenue generated by this segment. Despite this, Food Services decreased its share of net revenue by 2.5 percentage points, of which 2.1 percentage points between 2019 and 2023.

Finally, Real Estate Activities contributed 2.6% of the services sector's net operating revenue, while Maintenance and Repair Services accounted for 1.3%, showing, respectively, an increase of 0.1 percentage points and a decrease of 0.4 percentage points over 10 years.

Employment reached a record for the third consecutive year, and food services remained the activity that employs the most in the sector

In 2023, companies providing non-financial services recorded the highest number of employees (including formal salaried workers and partners) in the survey's time series, with 15.2 million employed persons, a result 7.1% higher than that obtained in 2022. Compared to the pre-pandemic period, employment in the services sector was 18.3% higher than the level observed in 2019, an increase of 2.4 million persons. This positive performance can be attributed to the increase in workers in the Professional, Administrative, and Supplementary Services segment, particularly in Technical-Professional Services (454,200), Office and Administrative Support Services (346,300), and Labor Recruitment, Agency, and Leasing (309,000).

The service sector segments that employed the most in 2023 were: Professional, Administrative, and Supplementary Services (6.7 million); Services rendered primarily to families (3.0 million); Transportation, support services for transportation and mailing (2.7 million); Information and communication services (1.3 million); Other service activities (692,000); Maintenance and repair services (434,700); and Real Estate activities (363,700). From 2014 to 2023, Professional, Administrative, and Supplementary Services was the segment in which the number of employed persons grew the most (3.7 percentage points). Conversely, Transportation, support services for transportation and mailing, and Services rendered primarily to families declined the most, with decreases of 3.1 percentage points and 2.2 percentage points, respectively.

Throughout PAS time series, Food Services was the category that employed the most. In 2023, it accounted for 11.7% of the total number of employed persons in the services sector, followed by Technical and professional services (11.2%) and Road cargo transportation (8.2%). This means that almost a third of jobs in the services sector were concentrated in these three activities (31.1%). Including Building and landscaping services (8.1%) and Office and administrative support services (7.8%), the five activities that employed the most, accounting for 47.0% of the services workforce.

Regarding the average salary in the services sector, the amount paid in 2023 (2.3 minimum wages) was similar to that of 2014 (2.4 minimum wages). Companies in the Transportation, support services for transportation services and mailing segment paid the highest average salaries: Pipeline transportation (21.1 minimum wages), Waterway transportation (7.0 minimum wages) and Air transportation (6.3 minimum wages). The lowest average wages, very close to the national minimum wage, were paid in Cultural, Recreational, and Sports Activities, Building and Landscaping Services, and Purchase, Sale, and Rental of Owned Property, all at 1.3 minimum wages.

The Information and Communication Services (4.7 minimum wages), Other Service Activities (3.6 minimum wages), and Transportation, Support Services for Transportation and Mailing (2.8 minimum wages) sectors paid wages above the service sector average in 2023.

Over the past 10 years, although the average wage in the service sector has remained relatively stable, there has been an increase in some activities, such as Pipeline Transportation (a gain of 2.4 minimum wages) and Auxiliary Financial, Insurance, and Supplementary Pension Services (1.3 minimum wages). Conversely, reductions occurred in Telecommunications (a reduction of 1.8 minimum wages) and Air Transportation (1.0 minimum wages).

Market concentration in the services sector was the lowest in the time series

In 2023, market concentration in the eight largest companies reached the lowest value in the survey's time series, with an R8 of 6.6%, representing a cumulative decrease of 2.9 percentage points over 10 years. The analysis of market concentration, measured by the R8 indicator, allows for the disaggregation of results for the seven major segments and the 34 activities that comprise the services sector. The higher the R8, the more concentrated the segments and activities.

The Information and Communication Services segment, rated as 29.6% in R8 in 2023, had the highest level of concentration, but also experienced the largest reduction between 2014 and 2023 (-7.9 percentage points). Next came Other service activities (24.3%), Transportation, support services for transportation services and mailing (12.6%), Maintenance and repair services (11.3%), Services rendered primarily to households (7.8%), Real estate activities (7.0%), and Professional, administrative, and complementary services (4.5%). It is worth mentioning that Other service activities showed an upward trend in market concentration, especially in the post-pandemic period, rising from 22.3% in 2019 to 24.3% in 2023.

Regarding the market concentration levels of the 34 activities that comprise the services sector, the highest were recorded in the Transportation, support services for transportation and mailing segment: Pipeline transportation (100.0%); Air transportation (94.7%); and Mail and other delivery activities (82.5%). On the other hand, the lowest R8 indexes corresponded to the activities of Passenger transportation (7.9%), Maintenance and repair of personal and household objects (7.9%), and Continuing education activities (4.9%).

From 2014 to 2023, the largest increase in concentration was in the activity of Non-real estate rentals and management of non-financial intangible assets (20.4%), which increased by 8.9 percentage points, while the largest reduction in concentration was in Rail and metro-rail transportation (68.6%), with a decrease of 16.0 percentage points in the indicator.

Southeast accounted for 64.4% of gross revenue from services

The Southeast once again led the ranking for gross revenue in the services sector in Brazil. In 2023, the region contributed 64.4% of gross revenue from services, followed by the South (14.9%), Northeast (10.1%), Central-West (7.9%), and North (2.7%). Over the 10-year period, the Major Regions showed relative stability in the composition of gross revenue from services, with increases of 0.5 percentage points in the South and 0.4 percentage points in the Central-West. However, there was a decrease in the contribution of the Northeast (-0.5 percentage points), Southeast (-0.2 percentage points), and North (-0.1 percentage points).

Communication and information services, which in 2014 was the main segment in 11 Federation Units, did not lead in any of them in 2023. Furthermore, Professional, administrative, and complementary services was the main type of service rendered in 25 of the 27 Federation Units. In the remaining states, road transportation, which includes both passenger and freight transportation, prevailed.

The share of information and communication services in gross revenue decreased in all Major Regions: -10.4 percentage points in the Central-West; -8.6 percentage points in the North; -8.0 percentage points in the Northeast; -7.4 percentage points in the South; and -3.0 percentage points in the Southeast. Conversely, Professional, administrative, and complementary services was the activity with the largest increase in its share in the South (an increase of 7.6 percentage points), North (6.0 percentage points), and Northeast (4.6 percentage points). In the Southeast, the activity with the greatest expansion was Other service activities (3.9 percentage points), while in the Central-West, Road transportation (7.3 percentage points) stood out.

All Major Regions of the country increased their respective numbers of employed persons. The Southeast ranked first, with 8.6 million persons employed, an increase of 13.5% (or 1.0 million persons) over the last 10 years. Next came the South, with 2.6 million persons working in the services sector (an increase of 530,400 persons or 25.4%), the Northeast, with 2.3 million persons (an increase of 391,200 or 20.2%), the Central-West, with 1.2 million persons (an increase of 219,900 or 21.7%), and the North, with 459,800 (an increase of 74,800 or 19.4%) workers.

More about the survey

The Annual Survey of Services aims at identifying the basic structural characteristics of the service business segment in Brazil and its transformations over time, covering, among other aspects, data on employed personnel, wages, revenue, expenses, and value added. Its results serve as a reference for analyzing the activities that comprise this sector and support the macroeconomic estimates of the System of National Accounts (SNA). The data are disaggregated for Brazil, Major Regions, and Federation Units.