Industry performance in Brazil suffers decline in May

According to a report from S&P Global, Brazil's purchasing manager index – “PMI” fell in May. One of the reasons cited is the environmental disaster in Rio Grande do Sul, which will impact Brazil's GDP. The country's “PMI” fell from 55.9 in April to 52.1 in May. According to the research, responses from interviewees from Rio Grande do Sul were excluded. Despite the blow, Brazil's economy continues to grow for the fifth month in a row, as the rate that determines expansion is 50 points.

“The PMI results showed a certain resilience capacity of Brazil's industrial sector, excluding the responses of companies directly affected by the catastrophic floods in Rio Grande do Sul, since the growth of new businesses, purchasing levels and employment remained stable”noted the note from S&P Global.

May data

The slowdown in sales growth, the stagnant production index and the dampening of price inflation were the key points presented in the report. Internationally, sales increased for the second month in a row, although they were reduced compared to April.

_{Data from the Brazilian PMI in May, collected between the 10th and 23rd (Photo: reproduction/S&P Global)}

Floods in Rio Grande do Sul

Still according to data from S&P Global, the PMI would be approximately two points lower if the responses of companies directly affected by the tragedy in Rio Grande do Sul were computed.

“With floods devastating homes, stores, farms, airports, roads, bridges, among others, manufacturers had difficulty receiving purchased inputs and were concerned about their impact on the general economy, customer orders and the fiscal budget .”pointed out Pollyanna de Lima, associate economic director S&P.

However, Pollyanna also points to a better scenario for next year:

“Still, expectations that relief efforts, investments and new product launches could support demand in the coming months encouraged optimistic forecasts of production prospects for next year and fueled job creation in May.”

Featured Photo: interior of a glass industry factory (Photo: reproduction/Freep!k)