Brazil: Manufacturing PMI recedes in February from almost one-year high
March 1, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) fell back in February, losing the ground gained in January. The index fell from January’s 47.4, which had marked the best result since February last year, to 44.5. As a result, 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, February’s deterioration came on the back of second largest drop in employment in nearly seven years. In addition, incoming new business deteriorated and production contracted at a sharp rate. Moreover, the weak value of the real continued to exert pressure on input costs, which increased at the sharpest rate since October 2008. As a result, cost inflation hit an over-seven-year high. Markit analysts added that, “Brazil’s economic woes continue to weigh on the manufacturing sector. Production was dragged down again in February as companies saw a sharper downturn in new business inflows and job cuts deepened further, adding extra strains to the country’s shaky economic situation. Those still in work are struggling to make ends meet, with inflation soaring further.”