Brazil manufacturing PMI falls in Dec to lowest since July: IHS Markit
- Most key sub-indices, including employment and new orders, pointed to continued expansion but at a slower rate.
- Manufacturing and industry have led the recovery in Latin America's largest economy from the worst of the COVID-19 crisis far quicker than services.
BRASILIA: The pace of expansion in Brazil's manufacturing sector decelerated in December for a second month to its slowest since July, a survey of purchasing managers' activity showed on Monday.
Most key sub-indices, including employment and new orders, pointed to continued expansion but at a slower rate. However, in an indication that momentum could pick up again soon, the future output index rose to its highest in nearly two years.
IHS Markit's headline purchasing managers index (PMI) fell to 61.5 from 64.0 in November. That marked the seventh straight month of growth, but the index's second decline in a row from October's series high of 66.7.
A reading above 50.0 marks expansion, while a reading below signifies contraction.
Manufacturing and industry have led the recovery in Latin America's largest economy from the worst of the COVID-19 crisis far quicker than services. These latest figures suggest that growth remains strong, even as momentum slowed.
"Brazilian manufacturers reported another surge of new business in December, with companies lifting output, employment and input buying in a race to rebuild safety stocks and meet current demand needs," said Pollyanna De Lima, Economics Associate Director at IHS Markit.
"Looking ahead, companies were optimistic that output levels would increase in 2021, but hopes were pinned on the COVID-19 pandemic coming to an end, the approval of government reforms and an improvement in material availability," she added.
The future output index rose to 89.5, the highest since January 2019, from 84.9, IHS Markit said.
The employment index slipped to 53.8 from 56.8 in November, while the new orders index fell to 63.2 from 66.3. The new export orders index fell to 52.8 from a series high of 55.3 in November, IHS Markit said.
Pricing pressures, which have surged this year due to the weak real, eased from November's record highs. The input prices index fell to 82.7 from 90.8, and the output prices index fell to 69.5 from 79.9.