Brazil: Manufacturing conditions deteriorate at steepest pace in four months in April
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) plunged to a four-month low of 44.3 in April, down from March’s 47.0. As such, the index moved further below the 50.0 no-change threshold, where it has been for the past six months. This signaled a starker deterioration in manufacturing sector operating conditions compared to the previous month.
April’s downturn chiefly reflected new orders declining at one of the steepest paces since the outbreak of the Covid-19 pandemic. A weak automotive sector, dwindling disposable income and subdued underlying domestic demand dampened factory orders. Soft external demand also hurt exports, although the decline was the slowest in six months. Consequently, output was scaled back in April: Production declined at the second-sharpest rate in nearly three years. Accordingly, the job shedding rate was among the steepest in recent years.
Turning to prices, input cost inflation accelerated in April due to higher prices for food, metals and plastic. Conversely, output charges were largely unchanged due to the weak demand environment and high competition. Lastly, firms’ sentiment regarding output expectations for the year ahead dropped to an 18-month low due to concerns about political and economic challenges.