September data indicated that growth in the Brazilian manufacturing sector was sustained as output and new orders continued to rise.
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Moreover, the ongoing upswing in demand from both domestic and external markets encouraged companies to scale up production at the quickest pace in four months.
Goods producers continued to exhibit a preference for lower inventory levels, however.
Meanwhile, the rate of cost inflation picked up, but competitive pressures and efforts to secure new business meant that output prices were raised only marginally.
At 50.9 in September, the seasonally adjusted IHS Markit Brazil Manufacturing Purchasing Managers’ IndexTM (PMI) was unchanged from August’s reading.
The latest figure signalled a modest monthly improvement in operating conditions.
Incoming new work increased for the seventh successive month in September, with panel members reporting better economic conditions, new client wins and higher sales to both domestic and export clients.
However, the rate of expansion was moderate and slower than in August.
New business from abroad also rose at a softer pace during the month.
Growth of total new work encouraged goods producers to increase output, which they did for the seventh month running.
Furthermore, the rate of expansion ticked up for the second time in a row to the strongest since May.
Detailed sub-sector data showed a broad-based rise in production, with expansions seen in the consumer, intermediate and investment goods categories.
Despite the continued rise in new orders, outstanding business declined again in September.
The pace of depletion was solid, but the slowest in one-and-a-half years.
Concurrently, the rate of job shedding was slight and broadly similar to those recorded in July and August.
Notably, employment increased at consumer goods producers for the first time since February 2015.
Manufacturers reduced both their stocks of purchases and finished goods for the thirty-third month in succession.
The sharper rate of depletion was seen for the former.
Inventories of inputs decreased in line with a renewed decline in buying levels.
However, quantities of purchases fell only marginally overall.
Largely associated with higher fuel costs, average input prices facing manufacturers continued to increase in September.
The rate of input cost inflation hit a six-month high and was above its long-run average.
Competitive pressures and efforts to secure new work resulted in only a marginal rise in output prices. ■