Brazil’s manufacturing activity expanded at a slower pace in April amid price pressures and input shortages, survey data from S&P Global showed on Monday.
The purchasing manager’s index for the manufacturing sector fell to 51.8 in April from 52.3 in March. A reading above 50 suggests expansion in the sector.
Production rose for the second month in a row, but the pace of expansion was modest, mainly due to automotive sector weakness, acute price pressures and global shortages of raw material.
Growth in new orders slowed in April due to future uncertainty among clients and inflationary pressures. Export business dropped at a faster pace.
Input price inflation remained sharp despite easing from March, on the backdrop of energy price volatility, raw material scarcity and the Russia – Ukraine war.
Consequently, firms continued to partly transfer cost burdens to clients by hiking selling prices in April.
However, the data showed that an improvement in business confidence among goods producers on expectations of better underlying demand, product diversification, investment plans and stable conditions after the presidential elections.
Employment grew at the quickest pace since October and backlogs were depleted at a slower pace.
“We’ll likely see hiring activity slowing in the coming months if demand remains subdued,” Pollyanna De Lima, economics associate director at S&P Global, said.
“Another factor that could inhibit future employment growth is inflation, as businesses seek to trim down their operating costs,” De Lima added.