Brazil: Conditions improve marginally in October

The S&P Global Manufacturing Purchasing Managers’ Index (PMI) declined for a fifth consecutive month in October, moderating to an eight-month low of 50.8. October’s reading came in below September’s 51.1 and moved closer to the 50.0 no-change threshold. This points to a continued, albeit moderating, improvement in manufacturing business conditions from the prior month.

October’s slowdown was chiefly due to new orders sliding for the first time in eight months; weak underlying demand was a drag on sales. Additionally, new export sales declined markedly. More positively, firms were confident over growth projections in the coming 12-month period, which favored the onboarding of staff in October; employment increased once again, for the eighth consecutive month. Lastly, with regards to inflation, lower commodity prices led to the first decline in input costs in eight years in October—and the starkest in over 13 years. This, in turn, led to the strongest decline in output charges since August 2009.

The analysts surveyed by FocusEconomics for this month’s LatinFocus Consensus Forecast see industrial production expanding 0.2% in 2022, which is up 0.1 percentage points from last month's estimate. In 2023, industrial output is projected to grow 0.9%.