Brazilian manufacturing PMI rises from 56.4 in June to 56.7 in July
RIO DE JANEIRO, BRAZIL – Brazilian manufacturing activity continued to grow in July as output and stocks of finished goods and employment increased. The shortage of inputs decreased in the month.
This is what the Purchasing Managers’ Index (PMI) from IHS Markit shows. The indicator rose from 56.4 in June to 56.7 in July, the highest level in five months. Readings above 50 indicate expansion of activity.
According to Markit, companies benefited from the strong increase in new orders and thus raised input purchases and production last month.
Production costs, however, continued to rise “substantially” because of the depreciation of the exchange rate and the increase in dollar prices of raw materials.
All three categories monitored by Markit registered activity growth. Capital goods were the best performer. “Encouraged by rising demand, goods manufacturers focused on rebuilding their inventories,” says the consultancy’s text.
The increase in inventories of finished goods rose for the fourth consecutive month and at the fastest pace in 15-and-a-half years of PMI. Inventories of parts and components also increased, as did sales, somewhat concentrated in the domestic market. Exports grew modestly over the period. Industrial employment grew, but at a lower rate than in June.
In the short term, the interviewed companies expect the recovery in demand to continue. There is optimism about the advance in vaccination in the country. “Overall, confidence remained high,” says Markit.
The PMI is calculated from responses to questions about orders, production, inventories, employment, and prices answered each month by about 400 manufacturing companies.
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