Brazil Manufacturing Downturn Deepens In August

(RTTNews) - The Brazilian manufacturing economy deteriorated at a faster pace in August amid a sharp fall in new orders, survey data from S&P Global showed on Monday.

The purchasing managers' index, or PMI, for the manufacturing sector dropped to 47.7 in August from 48.2 in July. Any score below 50 indicates contraction. Moreover, this was the sharpest downturn since mid-2023.

New orders declined at the fastest pace in over two years amid adverse demand trends, subdued client confidence, and the detrimental impact of US tariffs on customer orders.

Meanwhile, new export orders fell at the slowest pace in three months, helped by greater interest from clients in Europe and South America.

Output remained in contraction for the fourth straight month, linked to falling new orders and US tariff policy along with the restrictive monetary policy. Firms reduced workforce numbers and input purchases during August.

On the price front, input price inflation softened, and factory gate prices rose only marginally.

Looking ahead, firms remained confident about output expectations on the back of diversification, machinery acquisition, tech investment, and hopes of a rebound in demand.