Job creation softens in Brazil
Christian Fernsby ▼ |
The health of Brazil's manufacturing industry continued to strengthen in March, although there was a slight loss of growth momentum.
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A softer upturn in order books underpinned a weaker and only slight expansion in employment, while the ongoing fall in new export work was stretched to four months.
Nonetheless, stronger increases in output and input buying were registered. Concurrently, price indicators pointed to a build up of inflationary pressures.
The seasonally adjusted IHS Markit Brazil Manufacturing Purchasing Managers’ Index (PMI) fell from February's 11-month high of 53.4 to 52.8 in March.
The latest reading was consistent with a solid, albeit slower, strengthening of business conditions across the sector.
New orders and employment acted as drags on the headline figure, both increasing at slower rates in March.
The upturn in jobs was the weakest in the current threemonth sequence of expansion and only slight.
While some firms hired extra staff due to demand growth and a greater need for qualified labour, others cut payrolls amid ongoing cost-reduction initiatives.
Despite easing, the rise in new orders was solid and stronger than seen on average over 2018.
Companies noted greater consumption, new client wins and stronger domestic demand.
On the other hand, export sales declined for the fourth month in a row.
The downturn was only marginal, however, as the securing of new work at companies that benefited from real weakness partly offset contraction at those that cited subdued global demand.
Brazilian manufacturing production rose for the ninth successive month during March and at the quickest pace in one year.
According to panellists, the upturn reflected greater inflows of new work, efforts to boost inventories and upbeat growth projections.
Part of the goods produced in March were placed into inventories, as highlighted by back-to-back increases in holdings of finished goods.
The rise was slight and eased from mid-quarter.
Input stocks also expanded, and at a similarly modest pace to February.
Anecdotal evidence suggested that the rise in inventories stemmed from greater purchasing activity.
Not only did input buying increase for the fifth straight month, but also to the greatest extent in one year.
The pace of expansion was marked.
Input price inflation ticked higher due to BRL/USD depreciation, according to panellists.
The increase in cost burdens was the sharpest in five months and above the long-run series average.
Equally, charge inflation climbed to a five-month high.
Business confidence remained positive as manufacturers forecast greater client bases capacity expansion, investment in machinery and supportive
ublic policies to boost output over the coming 12-month period. ■
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