SÃO PAULO (Reuters) – Brazil’s industry continued to expand in March, albeit more slowly, with the strongest pace of demand in more than two and a half years fueling production and employment, according to the Managers Index survey of Purchasing (PMI).
S&P Global reported this Monday that its PMI for Brazilian industry was 53.6 in March, up from 54.1 in February. Despite the loss of strength, the index remains above the 50 mark that separates growth from contraction for the third month in a row.
CONTINUES AFTER AD
“The sector’s performance in the first quarter of 2024 was considerably better than that recorded in the fourth quarter of 2023. In fact, the average for the PMI was the highest since the three months until September 2021”, highlighted the associate director of economics from S&P Global Market Intelligence, Pollyanna De Lima.
Demand was essential for the March result, exerting a positive influence on several other index measures. New orders increased for the third month in a row, at the strongest pace since July 2021, with emphasis on the manufacturing of capital goods.
CONTINUES AFTER AD
Given this, manufacturers increased production in March, with the second strongest expansion rate since mid-2021, and also the creation of jobs.
However, they still reported difficulties with external demand, citing Asia, Europe and Latin America as points of weakness. Foreign sales decreased for the 25th month in a row, but the pace of reduction lost a little strength compared to February.
CONTINUES AFTER AD
There were also slight increases in input and production costs. Respondents cited having paid more for international freight, metals, plastics and textiles.
“Cost pressures remained relatively light and price inflation fell to a three-month low, increasing the likelihood of another interest rate cut,” De Lima said.
CONTINUES AFTER AD
The planning of acquisitions and openings of new factories, new products and investments supported the positive forecasts for production over the next 12 months, with the confidence sub-index indicating a strong degree of optimism.
