Financial News: Brazil Manufacturing Downturn Softens In February

Brazil Manufacturing Downturn Softens In February

03/01/2023 - 09:48:00 (RTTNews)

(RTTNews) - Brazil's factory activity remained in contraction in February, though the pace of decline has softened since the start of the year amid slower reductions in output and new orders, survey data from S&P Global showed on Wednesday.

The purchasing managers' index, or PMI, for the manufacturing sector rose to 49.2 in February from 47.5 in January. However, a reading below 50 suggests contraction in the sector.

The decline in output and new orders moderated in February. The overall rate of reduction in new business was the weakest in the current five-month period of downturn.

Output also dropped at the slowest pace in four months, and the current contraction was attributed to weak sales and public policy concerns.

Meanwhile, external demand fell sharply on challenges pricing competitively in international markets.

On the price front, input costs showed an upturn in February, led by a further rise in material costs along with currency depreciation. Nonetheless, the rate of inflation eased to the lowest in over five-and-a-half years. Output prices also increased only marginally.

A sustained deterioration in demand prompted firms to lower headcounts, trim buying levels and deplete input holdings in February.

Manufacturers expected demand to improve and interest rates to fall, supporting output growth. Positive forecasts were also supported by advertising, investment, and new product launches.

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