BRASILIA, Oct 1 (Reuters) - Brazil’s manufacturing sector expanded in September at its fastest pace in seven months, a survey of purchasing managers’ activity showed on Tuesday, led by solid gains in new orders and employment.
The IHS Markit Brazil manufacturing purchasing managers index (PMI) rose to 53.4 in September from 52.5 in August, the second consecutive month of growth and another indication that the worst for Latin America’s largest economy may be behind it.
A reading above 50.0 marks expansion in the sector, while a reading below signifies contraction. The last time the index was higher than 53.4 was almost two years ago in November 2017.
Official figures show that Brazil’s economy shrank by 0.2% in the first quarter and grew by 0.4% in the second, with the manufacturing PMI in all six of those months above 50.0. The headline index slipped to 49.9 in July but has climbed since.
Among the index’s sub-components, new orders rose to 55.1, the highest since March last year. Much of that may have come from abroad following the real’s 8% slide against the dollar in August, its biggest monthly decline in four years.
The employment index rose to 52.9, the highest since February this year and the second highest since February 2011. Brazil’s unemployment rate is a high 11.8% and wage growth remains weak, however, according to the latest official figures.
Brazil’s government and central bank both recently raised their 2019 economic growth forecasts to 0.9% from 0.8%, although that would still be below the sluggish 1.1% registered in each of the previous two years.
- Detailed PMI data are only available under license from IHS Markit and customers need to apply for a license. To subscribe to the full data, click on the link below: here For further information, please phone IHS Markit on +800 6275 4800 or email email@example.com (Reporting by Jamie McGeever Editing by Chizu Nomiyama)