Brazil’s manufacturing production grows for second consecutive month in April

Brazilian manufacturing industry continued to be in expansion territory in April, with growth of both new orders and output registering for the second straight month. The seasonally adjusted Markit Brazil Manufacturing PMI rose to 50.1 in April from 49.6 in March. The latest reading suggested widely unchanged business conditions facing goods producers.

New orders grew for the second consecutive month in April. Survey participants attributed this to improving demand conditions. Both the intermediate goods and consumer goods sectors witnessed growth, while a further contraction was clear at capital goods companies.

Data for April suggested that the increase in total new work was led by the domestic market as new exports orders fell, reversing the increase recorded in March. Production in manufacturing increased as a reflection of higher new orders. The latest rise was the second in several months; however, the rate of growth slowed from the marked pace in March. Moreover, the upturn was concentrated on the consumer goods category.

Data for April underlined the initial rise in quantities of purchases since January 2015, with survey members recorded greater production needs. In all, the pace of growth was marginal. Panellists have recorded that the relatively-weak real against the U.S. dollar led to a further rise in input costs. However, the rise in April was the slowest in six months, with some companies suggesting successful price negotiations with suppliers.

Manufacturing jobs dropped further in April, thereby stretching the current period of job shedding to 26 months. But the pace of reduction weakened to the slowest in this sequence, stated Markit. Manufacturers continued to remain positive towards the 12-month outlook for production, with growth likely to be underpinned by new client wins, machinery upgrades, launch of new product lines and an economic rebound.