Brazil Manufacturing PMI Returns to Growth

The S&P Global Brazil Manufacturing PMI rose to 50.8 in June 2026 from 49.1 in May, signaling a renewed improvement in factory conditions. The rebound was driven by stronger hiring, stock accumulation, and longer supplier delivery times. However, output and new orders remained in contraction territory, indicating that underlying demand stayed weak. The Suppliers’ Delivery Times Index also contributed to the headline increase, although longer delivery times were linked to supply-chain disruptions stemming from the Middle East conflict rather than stronger demand. Contractions in production and total new orders softened from May, but all three broad manufacturing segments still reported declines in output, orders, and external sales. Meanwhile, input costs rose sharply at the end of the second quarter, while output price inflation eased to its weakest pace in three months. Business confidence remained positive but fell to a 14-month low.

The S&P Global Brazil Manufacturing PMI fell to 49.1 in May 2026 from 52.6 in the previous month, signaling a renewed deterioration in factory activity after April's expansion. The survey showed manufacturers ended stockpiling efforts, with both purchasing activity and production declining amid weaker demand. Total new orders fell for the fourteenth consecutive month, while export sales contracted sharply as tariffs and the war in the Middle East weighed on demand. Supply-chain disruptions remained severe, with vendor shortages and the conflict causing one of the sharpest deteriorations in delivery times in nearly four years. As a result, input cost inflation stayed close to record highs, driven by rising energy prices, while output charges increased at one of the fastest rates since 2021. Still, manufacturers remained optimistic about future production, citing hopes for improved economic conditions after the presidential elections and an eventual end to the Middle East conflict.

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.