Brazil: Manufacturing PMI drops in December, but remains in positive territory
January 4, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, dropped to 61.5 in December from November’s 64.0, marking the lowest reading since July. That said, the index remained well above the 50-threshold, signaling an improvement in business conditions in the Brazilian manufacturing sector.
December’s reading largely came on the back of increasing production and new orders, albeit at a softer clip than in November. As a result, firms raised their staff levels for the sixth month straight, although the pace of job creation softened from the previous month. On the price front, input costs rose due to currency weakness against the U.S. dollar and raw material shortages, which led to higher output charges as firms passed on their costs to customers. Lastly, sentiment among firms remained positive in the final month of the year as firms were optimistic of the outlook for production in the coming 12 months amid hopes of the Covid-19 pandemic ending.
Author: Hanna Andersson, Economist