Brazil Manufacturing PMI Rises but Remains in Contraction

The S&P Global Brazil Manufacturing PMI rose to 46.1 in October 2026, from 44.8 in September, but remained considerably below the neutral 50.0 mark. Production fell for the sixth consecutive month, while new orders declined for the nineteenth month in a row. Although the pace of contraction eased, it remained the second sharpest in three and a half years. Export orders also fell at the start of the final quarter amid weak global demand and rising prices, although the decline was the softest since July. Employment in the manufacturing sector edged down, with some companies filling full-time vacancies while others cut jobs. Cost pressures eased across all three monitored manufacturing categories but remained elevated. Brazilian manufacturers raised selling prices to pass on some of these higher costs, with output price inflation matching September’s rate. Meanwhile, business confidence reached its highest level in nine months.

The S&P Global Brazil Manufacturing PMI fell to 44.8 in September 2026 from 46.3 in August, marking the sharpest deterioration in manufacturing operating conditions since April 2023. The quarterly average fell to 46.2, its lowest since Q2 2023. Factory output contracted for a fifth month, with the downturn the strongest since the COVID-19 outbreak in early 2020. New business declined at the fastest pace in nearly four years, while export demand fell for a fifth month. Lower workloads allowed firms to clear backlogs at one of the fastest rates in the survey’s history. Employment fell for a third month, although job shedding eased from August. Buying activity declined for a fifth month at the fastest rate since April 2023, while pre-production inventories posted their sharpest drop since October 2025. Cost pressures resurged, but weak demand and competition limited pricing power, pushing output charge inflation to a seven-month low. Firms remained optimistic about the year-ahead outlook.

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.