Brazil Manufacturing Contraction Eases in October

Brazil's S&P Global Manufacturing PMI edged up to 49.0 in March 2026 from 47.3 in February, marking the slowest contraction since May 2025 but remaining below 50.0 for the 11th consecutive month. New orders fell sharply, though at the slowest pace since December, as weak demand, Middle East tensions, and constrained budgets weighed on sales. Export orders stabilized after 11 months of decline, with some firms accessing new markets via US tariffs, though Argentina and China sales fell. Factory production contracted mildly, the weakest since October, with some restocking offsetting order cancellations. Input costs surged to an 18-month high on Middle East tensions and oil prices, prompting firms to raise selling prices to an 11-month peak. Employment rose slightly for the second straight month. Business confidence weakened to an 11-month low amid competition, geopolitical risks, and election uncertainty.

Brazil’s S&P Global Manufacturing PMI edged up to 47.3 in February 2026 from 47.0 in January, still signaling solid sector deterioration and marking the 10th straight month below 50. Capital goods remained the weakest sub-sector, while intermediate goods saw a marked decline matching January’s pace; consumer goods stabilized. New orders fell sharply, the fastest drop since September, and export orders declined for the 11th straight month. Firms cut production further, with the steepest contraction since June 2023, except at consumer goods makers, which saw renewed output growth. Employment rose marginally as some firms hired amid staffing shortages. Business confidence stayed positive, fueled by advertising, planned investment, new product launches, and the FIFA World Cup.

The S&P Global Brazil Manufacturing PMI fell to 47.0 in January 2026 from 47.6 in the previous month, marking the weakest conditions in four months. Weaker demand led to another fall in new orders, including lower foreign sales. Intermediate and investment goods producers saw sharp contractions, while consumer goods declined only marginally. Capital goods was the only segment to report growth in new export orders. Lower order inflows prompted a sharp cut in output, the second-steepest in over three and a half years. Purchasing activity declined, while factory employment fell for a second month. Input costs rose for the first time in three months, reflecting higher prices for foodstuffs, commodities, electronic components, metals and plastics. Output prices edged up slightly. Stocks of inputs and finished goods fell again. Business confidence improved to its highest level since June 2025, supported by expectations of interest rate cuts, stronger demand and investment plans.