Brazil PMI September 2016


Manufacturing PMI edges up in September

The Markit manufacturing Purchasing Managers’ Index (PMI) rose slightly in September, increasing from August’s 45.7 to 46.0. However, the PMI remains below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector as the Brazilian economy lingers in a deep recession.

According to IHS Markit, tight liquidity conditions, weak demand and a fragile economy continued to weigh on manufacturing in September. New orders from abroad fell at the sharpest rate since May 2009 amid fierce global competition. Destocking activity continued, albeit at a more moderate pace, and the decline in purchasing activity softened, driving the overall improvement in the PMI. Yet the rate of job losses remained profound and input prices rose at a sharp pace due to a depreciated real. Commenting on the result, IHS Markit analysts added that, “this sort of across-the-board weakness has been a usual theme for around one-and-a-half years and there remains very little to suggest any imminent change in direction for the sector.”

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Brazil PMI Chart

Brazil PMI September 2016

Note: Markit HSBC Brazil Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: IHS Markit.

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