Financial News: Brazil Manufacturing Activity Loses Growth Momentum

Brazil Manufacturing Activity Loses Growth Momentum

09/02/2024 - 10:41:00 (RTTNews)

(RTTNews) - The Brazilian manufacturing sector expanded at the weakest pace so far this year amid slower rises in new orders and rising price pressures, survey data from S&P Global showed on Monday.

The purchasing managers' index, or PMI, for the manufacturing sector dropped to 50.4 in August from 54.0 in July. However, a score above 50 indicates expansion.

New orders grew at the slowest pace in eight months due to lower demand for several products. Firms reduced their output volumes for the first time in eight months, often due to subdued sales, weak underlying demand, and elevated cost pressures.

On a positive side, international sales rose somewhat on the back of improved demand from Asia and the Middle East.

Cost pressures intensified in August as rate of input price inflation climbed to a 29-month high, led by higher costs for a number of raw materials in connection with currency depreciation.

Despite challenging operating conditions at present, Brazilian goods producers became more optimistic regarding the year-ahead outlook for production. The strengthening in confidence was stemmed from plant expansion plans, product diversification, investment, and forecasts of a pickup in demand.

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