Brazil: Manufacturing PMI broadly stable in December
Conditions in Brazil’s manufacturing sector were nearly unchanged in December, ending the year on a solid note. The manufacturing Purchasing Managers’ Index (PMI) was broadly stable at 52.6, down only a touch from November’s 52.7. November’s result had marked the best reading in eight months. The PMI lies above the crucial 50-threshold and in expansionary territory.
December’s healthy reading was driven by strong growth in new orders and output. New business was driven by solid domestic demand, while Argentina’s economic woes weighed on orders from abroad. In addition, business sentiment was upbeat, recording one of the best readings in the series’ history. That said, upbeat dynamics failed to translate into the labor market, and firms shed jobs in December. Meanwhile, input cost inflation continued to soften, in part due to an improvement in the real.