Brazil’s manufacturing conditions deteriorate in January, PMI drops to seven-month low

Brazil’s manufacturing industry’s business conditions worsened in January. The downturn was witnessed throughout the board. The seasonally-adjusted Markit Brazil manufacturing PMI dropped to a seven-month low of 44 in January from 45.2 in December. This indicates towards a sharper deterioration in the health of the sector, noted Markit.

New orders dropped at the most rapid rate since May 2015, in the midst of reports of subdued underlying demand and the ongoing economic crisis. Eventually, manufacturers have reduced production for the twenty-fourth month running in January, with the pace of reduction the most rapid since May 2016. The sharpest decline in output was recorded in the consumer goods category.

New export orders continued to decline in the opening month of 2017. Reductions were clear in each of the three wide areas of manufacturing, with the sharpest contraction seen at capital goods producers. Fewer output requirements along with continuing attempts to cut costs resulted in manufacturers to shed jobs again in January. In spite of easing since December, the pace of job losses continued to be steep. The most rapid decline in payroll numbers was registered in the investment goods category.

Manufacturers continued to stay positive about the prospects for output in the year ahead. Furthermore, the extent of optimism was the most robust since August 2016. Hopes of an economic rebound stimulated confidence in January, stated Markit.