Financial News: Brazil Factory Activity Contracts In May

Brazil Factory Activity Contracts In May

06/02/2025 - 10:27:00 (RTTNews)

(RTTNews) - The Brazilian manufacturing economy deteriorated for the first time in more than two years in May amid demand retrenchment, survey data from S&P Global showed on Monday.

The purchasing managers' index, or PMI, for the manufacturing sector dropped to a 17-month low of 49.4 in May from 50.3 in April.

Any score below 50 indicates contraction. Moreover, this was the first downturn since the end of 2023.

The renewed decline in May was due to subdued demand conditions. Output fell at the fastest pace since July 2023, while new orders fell at a moderate pace.

On the price front, input price inflation eased to a 14-month low as an appreciation of the Brazilian real against the US dollar and a greater supply of Chinese products curbed cost pressures. As a result, and along with fierce competition and a shrinking market, selling price inflation softened to the lowest since March 2024.

Looking ahead, firms remained confident about output expectations, with the positive sentiment rising from April's five-year low to its highest in nine months.

Strong growth outlook, coupled with the scheduled launch of new products, underpinned job creation, and the rate of employment was the quickest in three months.

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