Brazil PMI September 2016


Brazil: 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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