BRASILIA, Aug 4 (Reuters) - Activity in Brazil’s services sector expanded at its fastest pace in eight and a half years in July, a purchasing managers’ survey showed on Wednesday, driven by a surge in domestic new business and record growth in orders from overseas. The rise in activity helped fuel the strongest employment growth in the sector in more than a decade, pointing to a solid second half of the year for Latin America’s largest economy. IHS Markit’s headline Brazil services purchasing managers index rose to 54.4 from 53.9 in June, the highest level since January 2013. That helped pull the composite PMI including manufacturing up to 55.2 from 54.6 in June, the highest since last October. A PMI reading above 50.0 signals expansion, and a reading below shows contraction. Services account for around 70% of all economic activity in Brazil. According to survey participants, the upturn stemmed from the easing of COVID-19 restrictions and optimism on vaccine progress. “Although optimism regarding the outlook for business activity was sustained in July, several service providers pinned confidence on hopes that vaccines will become widespread and the pandemic will retreat,” said Pollyanna De Lima, economics associate director at IHS Markit. “The positive figures for services, coupled with strong numbers for manufacturing, resulted in accelerated rates of expansion for private sector sales, output and employment at the start of the third quarter,” she added. New orders in the services sector rose at their fastest pace since January last year, just before the pandemic, and employment growth was the strongest since 2010, IHS Markit said. Export orders were the highest since this particular sub-index series started in September 2014, IHS Markit said. (Reporting by Jamie McGeever; Editing by Paul Simao) Our Standards: The Thomson Reuters Trust Principles.