FX.co ★ Brazil’s Private Sector Slips Back Into Contraction as July Composite PMI Falls Below 50

Brazil’s private sector activity moved back into contraction territory in July, as the S&P Global Composite Purchasing Managers’ Index (PMI) fell to 48.8, down from 50.7 in June 2026. The latest reading, updated on 5 August 2026, signals a weakening in overall business conditions after briefly hovering in marginal expansion.

The drop below the 50.0 threshold, which separates expansion from contraction, suggests that both output and new business came under pressure across Brazil’s combined manufacturing and services sectors in July. June’s 50.7 reading had indicated a fragile and tentative recovery, but the reversal points to renewed headwinds for the broader economy.

For investors and policymakers, the July PMI decline may raise concerns about the durability of Brazil’s growth momentum in the second half of 2026. The move into contractionary territory highlights rising downside risks for employment, corporate earnings, and confidence if the downturn persists in the coming months.