Brazil Factory Activity Rebounds to 1-Year High

The S&P Global Brazil Manufacturing PMI rose to 52.6 in April of 2026 from 49 in the previous month, reflecting the first expansion in the country's factory activity in one year, and the highest in 14 months. The survey indicated that goods producers recorded a surge in production as clients aimed to front-load purchases of their input goods before disruptions from the war in the Middle East would result in shortages. Hence, demand improvements drove production increases to center around industries with exposure to the war, driving domestic orders to continue falling. The higher demand for capital goods, in addition to already-present supply disruptions from the war, drove input cost inflation to its highest in survey history, while output charges rose the most since September 2020. Still, business optimism was buoyed by hopes that the war could end soon, maintaining traction for orders.

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.