Brazil: Manufacturing PMI improves from November's nearly seven-year low in December
January 4, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) gained back some lost ground in December, rising from November’s 43.8 to 45.6. November’s result had marked the worst reading in almost seven years. Despite the improvement, the PMI remains below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector. Brazil’s economy has been plagued with a slew of bad economic data in the past months that suggest the economy’s deep recession shows no signs of abating.
According to Markit, December’s figure came on the back of slower, albeit still sharp, contractions in output and new orders. The country’s current economic crisis was evident among survey participants, as employment, buying levels and stocks all declined. On the bright side, new orders from abroad increased, likely supported by a weaker real. Markit analysts added that, “with the country bombarded with bad news, ranging from a depreciating currency, credit rating downgrades, political frictions, skyrocketing inflation, arrests following the Petrobras probe and a growing budget deficit, there is little to suggest any improvement in economic conditions in the near future, and 2016 looks set to be another year of great challenges.”