Brazil PMI July 2016


Manufacturing PMI improves but remains in contraction territory

The Markit manufacturing Purchasing Managers’ Index (PMI) rose in July, increasing from June’s 43.2 to 46.0. Despite the rise, the PMI is below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector amid a deep recession in the Brazilian economy.

According to Markit, July’s relative improvement came on the back of a less pronounced contraction in output, new orders, purchasing and stocks. In addition, the rate of jobs lost eased from last month. Commenting on the result, Markit analysts added that, “other highlights in the data were the latest developments in manufacturers’ input and output prices, both of which rose at softer, albeit still robust, rates. If easing inflationary trends continue in coming months, we will likely see the central bank loosening monetary policy in an effort to shift Brazil out of recession.”

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Brazil PMI Chart

Brazil PMI July 2016

Note: IHS 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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