Brazil: Manufacturing PMI falls to nine-month low in March
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, dived to 52.8 in March, from February’s 58.4, marking a nine-month low. Consequently, the index remained above the 50-threshold, signaling an improvement in business conditions compared to the previous month; however, it hinted at cooling momentum.
March’s result largely reflected a spike in new Covid-19 cases and the reimposition of restrictions. Weakening demand led to falling new orders, while output fell for the first time in nine months in March. Moreover, employment fell for the first time in eight months as firms tried to cut expenses by reducing payroll numbers. On the price front, input cost inflation rose markedly in the month amid supply-chain disruptions, raw material shortages, higher freight fees and currency weakness. As a result, output charges also rose sharply. Lastly, sentiment among Brazilian firms weakened to a ten-month low due to the surge in virus cases; however, firms still remained confident over the outlook for output in the coming year.