FX.co ★ Brazil Manufacturing Conditions Worsen for 1st Time since 2023

The S&P Global Brazil Manufacturing PMI dropped to 49.4 in May 2025, marking its lowest point since December 2023, after recording 50.3 in the prior month. This reading signifies the first decline in operational conditions in nearly 18 months, attributed to a retrenchment in demand. New orders decreased more significantly than in April, and production saw its first reduction in four months, with a decline at the sharpest rate since July 2023, mirroring the slowdown in new business inflows. Although input costs continued to rise, inflation reached its lowest level since March 2024, thanks to the appreciation of the Brazilian real against the U.S. dollar and an increased influx of Chinese products. Additionally, positive expectations and the planned introduction of new products bolstered job creation. Meanwhile, business optimism improved from April’s five-year low to reach its highest level in nine months, as companies anticipate that acquisitions, new product launches, recruitment efforts, and technology investments will bolster output in the coming year.