FX.co ★ Brazil Manufacturing Growth Remains Robust In October

In October, the Brazilian manufacturing sector experienced robust growth, primarily fueled by heightened export demand, according to survey data released by S&P Global on Friday.

The manufacturing sector's Purchasing Managers' Index (PMI) decreased slightly to 52.9 in October from July's 53.2. Nonetheless, a PMI reading above 50 signifies expansion within the sector.

October marked the tenth consecutive month of growth in new orders, although the expansion rate has slowed compared to September. This moderation in domestic demand was offset by international orders, with export orders increasing at the fastest rate since November 2020. This surge was driven by rising demand from regions such as Africa, Japan, and the Americas.

Reflecting this positive client demand, manufacturing firms elevated production volumes at the swiftest pace seen in six months. Additionally, manufacturers aimed to replenish inventories, leading to the second-fastest surge in input purchases in more than three years.

October also witnessed a rise in employment numbers, though the rate of job creation was the slowest in ten months.

Cost pressures persisted, exacerbated by unfavorable weather conditions, a weakened currency, and increased freight charges. However, the overall inflation rate dropped to its lowest level in four months. Similarly, the rate of charge inflation, while still notable, was the lowest in seven months.

In other developments, the country's industrial output increased by 1.1 percent in September compared to a 0.2 percent rise in August, according to the national statistics office, IBGE. Annually, the growth rate accelerated to 3.2 percent from 2.3 percent.