Brazil: Manufacturing PMI improves but remains in contraction territory
July 1, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) rose in June. The index increased from May’s 41.6—its worst result in over seven years—to 43.2 in June. For the seventeenth consecutive month, the PMI is far below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector amid a deep recession in the Brazilian economy.
According to Markit, June’s relative improvement came on the back of a less pronounced contraction in both output and new orders. However, overall PMI data remains bleak as the country’s recession continues. Employment declined at the fastest pace on record while input costs continued to climb. Commenting on the result, Markit analysts added that, “the latest results showed another record contraction in employment levels. Some domestic improvements will be needed before any serious talk of a recovery can begin.”
Author: Christopher Mc Innes, Economist