Brazil’s manufacturing activity contracted at the fastest rate in more than three years in April amid reductions in output, new orders and buying levels, survey data from Markit Economics revealed Monday.
The HSBC Brazil Purchasing Managers’ Index fell to a 43-month low of 46 from 46.2 in March. A PMI reading below 50 suggests decline in activity and the sector has now contracted for the third consecutive month.
Production levels were reduced at the fastest pace since March 2009, due to weaker demand from both domestic and export markets and output fell across al the three monitored categories.
New orders fell for a third successive month and at the sharpest rate since September 2011. Tough economic conditions, strong inflation and weaker demand were cited as the main reasons behind the decline.
Export orders eased slightly owing partly to competitive pressures at a global level and the decline was most marked in intermediate goods production.
Jobs were cut for a second straight month in April and the pace was largely unchanged from March’s 32-month record, thanks to cost-cutting policies and declining new orders.
Input costs rose further amid rising prices for utilities, imported raw materials and semi-finished products, which was partly due to the weaker Brazilian real.
Manufacturers passed on part of the increase in costs to clients, leading to a rise in selling prices, which was the biggest increase in one-and-a-half years.
“The Brazilian manufacturing economy appears to be diving into recession,” Pollyanna De Lima, Economist at Markit, said.
The material has been provided by InstaForex Company – www.instaforex.com