Brazil PMI October 2016


Brazil: Manufacturing PMI lingers in contractionary territory in October

November 1, 2016

The Markit manufacturing Purchasing Managers’ Index (PMI) rose slightly in October, increasing from September’s 46.0 to 46.3. However, the PMI remains below the 50-threshold that separates contraction from expansion in business conditions in the manufacturing sector as the Brazilian economy lingers in a deep recession.

According to IHS Markit, economic malaise was seen across the survey with falls recorded in purchasing activity, employment and output. Export orders fell at the fastest pace since May 2009 as subdued global demand hit manufacturers. Commenting on the result, IHS Markit analysts added that, “whereas it’s hard to see what might break this downward cycle in the coming months, the Central Bank may have provided a touch of light. Having lowered the benchmark rate for the first time in four years in order to support a long-waited recovery and in line with somewhat cooler inflationary pressures, the latest move might underpin investments in the sector.”

Author: Angela Bouzanis, Senior Economist

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Brazil PMI Chart

Brazil PMI October 2016 1

Note: Markit Brazil Purchasing Managers’ Index (PMI). A reading above 50 indicates an expansion in business activity while a value below 50 points to a contraction.
Source: IHS Markit.

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