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World

Brazil manufacturing PMI falls to 10-month low in April

  • The headline PMI fell to 52.3 in April from 52.8 in March, the lowest since last June.
  • A reading above 50.0 marks expansion, while a reading below signifies contraction. The series was launched in 2006.
03 May 2021

BRASILIA: Growth in Brazil's manufacturing sector decelerated in March to its slowest rate since June last year, a survey of purchasing managers' activity showed on Monday, and prices charged to customers rose towards their recent historic highs.

While a brutal second wave of the COVID-19 pandemic weighed on overall activity, employment rose and companies were more optimistic about future conditions, IHS Markit's latest purchasing managers index (PMI) report showed.

The headline PMI fell to 52.3 in April from 52.8 in March, the lowest since last June.

A reading above 50.0 marks expansion, while a reading below signifies contraction. The series was launched in 2006.

"Survey participants see a light at the end of the tunnel, with many expecting that greater vaccine availability will help curb the spread of the disease and (lift) restrictions. Business sentiment improved ... supporting renewed job creation," said Polyanna de Lima, economics associate director at IHS Markit.

"Inflation continued to surge, with goods producers lifting their charges at the third-steepest rate in the survey's more than 15 years of history," she said, citing a global shortage of raw materials.

IHS Markit's employment index rose back above the 50.0 threshold, to 51.8 from 48.5, while the future output index rose, IHS Markit said.

The output prices index, which measures prices charged to customers, rose to the third highest in series history and close to the top two readings from last year.

Consumer price inflation in Brazil is running at more than 6%, well above the central bank's year-end target of 3.75%. The central bank is widely expected to raise interest rates next week by 75 basis points for a second time.