Brazil: Manufacturing PMI falls in August
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) came in at 53.6 in August, down from July’s 56.7. Consequently, the index remained above the 50-threshold, pointing to a continued, albeit moderating, improvement in business conditions from the previous month.
August’s reading was driven by milder output growth, amid input shortages and tepid foreign demand. Employment growth also eased, while international orders declined. On the price front, shortages and a weak real increased cost burdens, which fed into higher selling prices. Finally, stocks of finished goods increased at a record rate, as firms aimed to ward off potential supply disruptions and clear backlogs.
On the reading, Pollyanna De Lima, economics associate director at IHS Markit, said:
“The PMI data brought the desirable news that Brazil’s manufacturing industry remained in expansion mode during August. With their order books rising, companies lifted output and continued to hire additional workers. […] Firms again faced many hurdles, however. Raw material scarcity, a key theme of most PMI reports published globally, yet again caused a steep rise in input costs.”