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Brazil PMI June 2023

Brazil: Manufacturing conditions deteriorate at steeper pace in June

The S&P Global Manufacturing Purchasing Managers’ Index (PMI) fell to 46.6 in June, down from May’s 47.1. As such, the index moved further below the 50.0 no-change threshold, where it has been for the past eight months. This signaled a starker deterioration in manufacturing sector operating conditions compared to the previous month.

June’s deterioration was largely due to the ninth consecutive month of steeply falling new orders. Weaker Latin American demand amid tighter import controls in Argentina hurt new exports. Consequently, production volumes were scaled back at a brisker pace than in the prior month. As a result, firms let go of staff in June.

Turning to prices, input costs fell at the steepest rate in 14 years due to an excess supply of raw materials, lower commodity prices and a stronger real against the USD. This, in turn, allowed for selling prices to be reduced at the fastest pace since 2009 in a bid to attract customers amid a high-competition environment. Lastly, firms remained optimistic regarding output in the coming year, supported by expectations of softer inflation, lower interest rates and improving demand and investment.

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