Brazil: Manufacturing PMI falls to 16-month low in October
October 1, 2021
The IHS Markit Manufacturing Purchasing Managers' Index (PMI) fell to 51.7 in October, down from 54.4 in September and hitting its lowest level since June 2020. Consequently, the index moved closer to the 50-threshold, pointing to a continued albeit slower improvement in business conditions from the previous month.
October’s lower reading was driven by decreasing new orders and production, both of which fell for the first time in six months. Nevertheless, hiring activity increased, with employment growth remaining robust in October. On the price front, shortages amid high demand for raw materials saw input prices continue to rise, with manufacturers lifting their output prices in turn.
On the reading, Pollyanna De Lima, economics associate director at IHS Markit, said:
"The PMI results showed that lingering supply-chain problems highlighted by Brazilian manufacturers in recent months escalated considerably in October, after receding in September, thus having a negative impact on firms' orders books and production. With companies unable to source key raw materials, production schedules were halted and clients postponed purchases in views that orders would not be fulfilled in a timely fashion.”
Author: Stephen Vogado, Economist