Brazil Manufacturing PMI Hits Five-Month Low

The S&P Global Brazil Manufacturing PMI fell to 46.3 in August 2026 from 47.5 in July, signaling a second consecutive monthly deterioration in sector conditions and the steepest contraction in 40 months. Output declined for the fourth consecutive month and at the fastest pace in more than three years. New business fell for the seventeenth straight month, with the contraction accelerating from July. New export orders declined for the fourth consecutive month and at the fastest pace in more than three-and-a-half years. Weaker demand weighed on staffing and capacity, with employment falling for a second month and at the fastest pace since October 2025. Backlogs also declined further. Inventory and purchasing data pointed to cautious operating conditions, while price pressures eased for a fourth consecutive month. Despite the weak activity data, manufacturers remained optimistic about the year-ahead outlook.

The S&P Global Brazil Manufacturing PMI fell to 47.5 in July 2026 from 50.8 in June, signaling a renewed deterioration in the sector and the sharpest contraction since February. New orders posted their steepest decline in more than three years, while export orders also fell markedly amid weaker external demand. With both domestic and foreign sales declining, manufacturers cut production for a third straight month at the fastest pace since February. Employment fell, ending a five-month hiring streak, while backlogs continued to shrink. Input costs increased, with firms citing the Middle East conflict as a key driver, pushing output price inflation to historically elevated levels. Lower sales, ample inventories, and geopolitical uncertainty also led to the fastest decline in purchasing activity since February. Despite the downturn, business confidence improved to above its long-run average.

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.