Brazil: Manufacturing PMI regains lost ground in January, rises to almost one-year high
February 2, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) gained back some lost ground in January, rising from December’s 45.6 to 47.4. January’s reading marked the best result since February last year. Despite the improvement, 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, January’s figure came on the back of slower contractions in output and new orders. New orders from abroad expanded at the fastest pace in six years, in part, thanks to the weaker real. However, the weak real drove an increase in input prices. Job losses were recorded again in January, albeit at a more modest rate of decline than in the previous month. Markit analysts added that, “while signs that the downturn eased further at the start of 2016 are a step in the right direction, the industry still has a lot of ground to make up after recording a ‘lost year’ during 2015. With demand still weak, especially in the domestic market, and the ongoing political logjam, the chances of such a revival taking hold soon are slim.”