Brazil: Manufacturing PMI improves in March
April 4, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) rose in March, recovering some of the ground lost in February. The index increased from February’s 44.5 to 46.0. Despite the rise, the PMI remains below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector as the economy remains in a deep recession.
According to Markit, March’s improvement came on the back of smaller contractions in output and new orders. New export business grew at the fastest pace in over six years on the back of a depreciated real. However, although the pace of job shedding eased, the rate still remained sharp overall and data continues to point to spare capacity in the manufacturing sector. Markit analysts added that, “the Brazilian manufacturing sector remained stuck in contraction during March as output and new orders continued to fall. That said, there were pockets of solid foreign demand reported, partly offsetting the weakness in the domestic market. Manufacturers will be hoping that improved competitiveness at the global level, aided by the weaker currency, can help sustain growth […] in coming months.”